But I tend to think that the key point here is that FriendFeed needs to remain something of a niche service in order to continue to function as it does today. As of right now most items on FriendFeed generate a manageable number of comments, and even mere mortals like me are able to contribute comments. We can engage in discussions with the illuminati of the blogosphere such as Robert Scoble, Dave Winer and so on and as such FriendFeed feels to me like the freshest and most accessible place on the web at the moment.

If it were to attract significantly more users I think the intimacy of the current FriendFeed would start to fade and that would be a great shame. I’m aware that sounds snobbish but it also gels nicely with another recent post - this one a guest post on LouisGray.com - about the accessibility of big hitters in the blogosphere.

Some have suggested that recent changes to Facebook create a FriendFeed like experience there. But the biggest difference is the closed user group that will participate in discussions on Facebook (defined by “friend” connections, ironically, whereas on FriendFeed no-one has to explicitly accept me as a friend in order for me to engage in a discussion with them.

In fact I think it’s probably almost inevitable that FriendFeed loses its niche status, or at least that it becomes used for other things than the friendly discussions I currently enjoy so much there, with its current function being demoted to a secondary role and a group of desperate hangers-on clinging to the old model.

PS wrote most of this on the iPhone app while waiting for a doctor’s appointment - worked pretty well but highlighted the significant limitation relating to the lack of a copy and paste function on the iPhone - hence, no hyperlinks unless you finish the project up on the computer or have a really good memory (and html skills)…

(now posting from the keyboard - much easier)

It seems the ampersand didn’t cause a problem after all - just shows up funny in the categories list and in the “write” mode in the application. But the screenshot worked fine - not many options for how you incorporate an image like that - how you want text aligned, whether you want it linked to a larger version etc - but it’s probably best to keep things simple in a mobile app.

And no mystery tag post this time around, which means it was a one-off - I’ll have to test it on my other blogs to see if it happens every time you first use the app on a blog or if there was just an error somewhere this time around. At any rate, another useful application from the App Store - and best of all this one’s free, as many of the best ones are…

For info, this was the mystery post that showed up (which I’ve deleted to avoid clutter and confusion) - also viewable in its original format in the screenshot above:

!$title$!

July 22nd, 2008

!$text$!

Update: glad to see I wasn’t the only one with this problem: the venerable TechCrunch, no less:

Link apparently since removed, at least from the TechCrunch homepage.

So was it all worth it? Well, as one man standing behind me in the line (possibly a Rabbi - in the center of the picture below) said:

You have to do something insane once in your life!

And that was more or less my opinion too - I don’t often stand in line for these things, but once in a while you want to be part of something like this. I sat out the first round - no 3G, stuck on a Verizon contract, don’t buy version 1 of anything and so on - but wasn’t going to do the same this time around.

I love the device. It’s a fantastic experience, and certainly the most fun I’ve ever had with a new phone. To date, I’ve downloaded and installed 23 applications, requiring four home screens altogether on the device (I have a separate one for web clips). I did have activation problems on the first day, along with everyone else, although they were relatively minor and solved by the evening.

I’ve read a lot of articles denigrating the iPhone in pretty strong terms over the past few days - two examples. The thing that strikes me about these articles is that they seem to assume that the iPhone is taking over the world. The Lifehacker article is titled, “Why You’re Better Off Avoiding the iPhone” and the other suggested the iPhone is going to kill the Internet.

Let’s tone that done a bit, shall we? For starters, Apple sold a total of 1 million phones in the first weekend and has since been largely sold out. Compare that with Nokia, which sells more devices than that every single day of the year, and you are quickly reminded that Apple does not dominate the mobile device market (or even the smartphone segment). Secondly, no-one is being forced to buy an iPhone - you have a choice about buying it as you do with every other device out there - and as a consumer you will weigh the pros and cons as you would with every other device. If you don’t like the relatively “closed” ecosystem and approach to applications, you don’t have to buy the phone. But, if you want the design, interface, web browsing, ease of use and so on and think the closed application environment is a small price to pay, then you’ll want to buy it anyway.

The most alarmist and hostile stuff I’ve read comes from the Free Software Foundation, which seems to have a definition of “free” which is much narrower than most people’s would be. But again, it seems to somehow assume that Apple has some kind of monopoly and that everyone is somehow tied into the Apple model whether they want to be or not. The Apple DRM approach in particular has come in for a lot of criticism, which is funny since it’s done at the behest of the record companies rather than any particular agenda Apple has. In order to secure for itself a strong position in online music sales, it acceded to the requests of the record companies to provide adequate copyright protection for their music. As the record companies have become more enlightened in their approach, Apple has begun releasing music in non-protected formats. But again, you have a choice - Amazon, Rhapsody, Napster and plenty of others offer alternative models for purchasing digital music online, and files bought from all those companies will play on iPods and iPhones.

Overall, I think Apple is adding a lot more to the mobile industry than it is taking away, and on a personal level I love the device and especially the ease of use of the device itself and the process of adding applications and media to it. It may not be everyone’s cup of tea - the FSF recommends the Free Runner, which strikes me as being an utterly uninspired (and uninspiring) device. But whatever floats your boat - and that’s the real point here: you have a choice. Stop moaning about the way Apple does things, and find a company that does things the way you like, and buy their stuff instead.

The long tail theory has a lot of appeal - it instinctively makes sense to most of us (we’ve all bought things online we could never have bought in our local store) and the data seem to bear it out, at least as far as the buying patterns go. However, I think one of the weaknesses of the theory is still the viability of any business case based on the long tail. Very few specialist retailers have been able to make a living off the tail itself - most have to focus on the head first and add the tail second - blockbusters in any business still do constitute the bulk of sales, especially from ordinary consumers. As Anderson points out (and the study he cites confirms) heavy users (i.e. fanatics and aficionados) are more likely to consume from the tail, which also makes instinctive sense. But it’s terribly difficult (and market limiting) to focus on the fans and not the core market. 

Still, perhaps the parties that benefit most from the long tail are the producers of long tail products and content: they benefit whether suppliers sell just the tail or the head as well, as do we as consumers.

In the end I decided to start doubling up on profiles - one for my personal life, one for my business life - on these major sites, and so far it’s working well. I now have a business-centric Facebook profile, a business-centric Twitter account, a new account on Friendfeed and work-centric IM accounts with all the major providers (janovum on Yahoo!, Google Talk, AIM, Live/MSN and Skype). My choice of username might eventually be a problem if and when I leave Ovum, but for now it’s easy to remember but most of all has the salient virtue of being available on all these services (have you ever tried picking a username that will be available on all of these, including AIM and Yahoo!? Very difficult). 

If you’d like to connect, please feel free to look me up in one of those places - I’ll be happy to “friend” you, add you to a “buddy list” or be followed by or “follow” you. I’d like to make these networks as inclusive and broad as possible, and also hope to make them as interconnected as they can be - I already have Twitter and Friendfeed apps running in my Facebook profile, for example, and Friendfeed itself is pulling in my Tweets, blog posts and shared items from Google Reader. 

Some day, I’m hoping that all these services will allow me to be a single individual with multiple profiles for friends, family and work, for example. A while back I heard that Moli offers such split profiles, and I did try that service out, but until it’s used by a lot of other people it’s not all that helpful. But I do believe that splitting the social and business aspects of your life in a single profile will become an increasingly important feature of these sites going forward. It’d certainly be a lot easier than my current approach, which involves using different browsers for different profiles (when I’d much rather live in Firefox in Windows or Safari in Leopard) so that I can stay signed in to each service. 

How have you handled this problem? Do you just mix both in a single profile and not worry about mixing business and pleasure? Have you found another approach that works better?

You’ll find Anagran bandwidth fairness boxes (also called FR-1000s) in university settings now, where the P2P file transfer problem is most acute. Anagran doesn’t currently have any commercial ISP customers, but I’ll bet that they’re all looking at them.

Absolutely, and no doubt Comcast is among them. I still maintain that the best approach to dealing with P2P traffic is having an explicit public statement about your policy towards it that all your customers can read and be aware of, and then throttle/shape the traffic in such a way that other forms of traffic are unaffected during periods of network congestion. At any rate, this is another wrinkle in the always interesting net neutrality debate.

I am quite disappointed at how Windows Usability has been going backwards and the program management groups don’t drive usability issues.

Let me give you my experience from yesterday.

I decided to download (Moviemaker) and buy the Digital Plus pack … so I went to Microsoft.com. They have a download place so I went there.

The first 5 times I used the site it timed out while trying to bring up the download page. Then after an 8 second delay I got it to come up.

This site is so slow it is unusable.

It sounds just like so many of those experiences we all have with Windows and with Microsoft sites. How great that Bill Gates himself was willing to take his team to task and ask for improvements. Except that the date on this particular email is January 15, 2003. Meaning the team has now had almost five and a half years to solve these problems. But they haven’t. We’re still all having them. Have you tried to buy the home and student edition of OneNote from the Microsoft website lately? I have. It’s not possible. You can buy a boxed version from Amazon, but not from Microsoft.com (or at least I haven’t been able to figure out how). And Windows itself remains as unintuitive an experience as it ever was, with some new annoyances added with Vista.

So what’s the problem? Did the staff get so many of these emails from bgates@microsoft.com that they started ignoring them? Or are they pathologically unable to implement this kind of basic user feedback? Does someone at Microsoft actually believe this all makes sense? Who are they doing their formal user testing with? And can we replace those people with Mac users? How can a company so successful still be so bad at the user experience? How hard would it be to hire a slew of user experience designers to solve these problems?

A while back I was at a Cisco analyst event where a guy who used to work for Apple and Frog Design and now works for Cisco spoke about how they are approaching UI design. He shared several examples of how the Mac OS does things compared with how Windows does things, and they were all obvious big differences and in the vast majority of the cases it was obvious too that the Mac version was better. With all the copying Windows does from Mac OS already, how hard would it be to copy some of the design principles too?

First headline: The telecom players ranked in the survey end up as follows:

1. AT&T: 2nd overall, with spending of $3.2 billion in 2007
2. Verizon: 3rd, $3.0 billion
3. Sprint: 15th, $1.9 billion
4. Deutsche Telekom (T-Mobile): 52nd, $0.8 billion
5. Alltel: 93rd, $0.36 billion

(The only company spending more than AT&T and Verizon in 2007 was Procter and Gamble.)

Let’s crunch those numbers a bit. First, let’s look at how much these companies spent in relation to their revenues:

• AT&T: 2.7% of revenues
• Verizon: 3.2%
• Sprint: 4.7%
• T-Mobile: 5.9%
• Alltel: 4.1%

With the exception of Alltel (more on them in a minute), the trend is very clear among the first four players on the list: the smaller they were, the greater a proportion of their revenues they spent on advertising. It’s obvious why: if these companies want to have a similar impact to the larger companies, they need to spend as close as possible to their larger competitors, but that amount is a (much) greater proportion of revenues for them. In fact, only Verizon actually approaches AT&T in size of spend (and it increased its spend 8% in 2007 while AT&T reduced its spend by 4%, perhaps thanks to the advertising Apple did on its behalf with the iPhone, but likely also because it was able to consolidate spending once it had unified its brands).

This is a massive scale advantage for the larger players, and a massive scale disadvantage for the smaller ones. For Sprint and T-Mobile to even remotely compete with the two big guys, they have to eat into their profits considerably more, which creates further disadvantages. Alltel, as to some extent a regional carrier rather than a national one, perhaps spends its money a little more carefully, realizing that large national campaigns are going to hit a lot of people not in its core service areas.

Another interesting set of data to look at is the media these companies spread their advertising over, and the portion of total spend that goes to each. One might think it would be fairly similar, especially for the larger players, but in fact there’s quite a range, as you can see from the chart below.

Alltel spends 71% of all its ad spending on TV advertising, while Verizon only spends 42% on TV. Verizon and Sprint spend 32-35% of their money on newspaper advertising, while AT&T thought that medium was worth only 15% of its spend. Meanwhile, Internet spending is a fraction of the total for all five carriers: from 5% for Alltel to 8.8% for Verizon. However, this reflects overall Internet ad spending trends as much as carriers’ reluctance to advertise there: Verizon is the third highest spending company on Internet advertising, while AT&T is eighth. But what drives this difference in the media used for advertising? Even if you allow for the fact that the balance between mobile and wireline offerings is different for these five carriers, that doesn’t seem to explain it. They just seem to have fundamentally different views of what’s likely to work best for them.

On another note, there’s no category in here yet for mobile advertising - for all the hype, it’s still tiny. and even Internet advertising, another category telcos could have a stake in, is just 4% of total advertising spend today (although rising relatively quickly). But it amounts to just $4 billion in total for the US in 2007, not a big pie for telcos to try to take a slice of. TV advertising seems a much better bet, to the extent that they can take a chunk away from the cable operators, with almost $35 billion of spending in 2007. Meanwhile, the cable companies themselves (with the exception of conglomerate Time Warner) don’t make it into the top 100 at all.

January, sorry.  I will make sure you get the info.

I guess they have their auto-correct set to replace the word “Jan” with the word “January”. Haven’t had that one before, I have to admit…

Hi Jan (pronounced ‘Yawn’)

It is pronounced “Yawn”, at least in an American accent, but someone has clearly added that little factoid to the surname field in their contact management system instead of a notes field. As a result, when they ran a mail merge or something similar for an emailed press release, it made it in there. Good job it didn’t say, “lousy analyst - doesn’t know what he’s talking about” or anything similar…

2008 may be the year that Google’s innocence ends, as media and governments start to cast a less forgiving eye at the behavior of the company that controls 60% of the search market and perhaps as much as half of all online advertising revenue.

…

There’s no getting past the fact that Google has out-competed everyone in the search game, and is justly collecting the economic rewards of that effort. But society loves to tear down their heroes just as quickly as they supported them as underdogs.

This may be the year that things change for the ten-year-old Google. Their days of innocence may be over - perhaps Yahoo, or Firefox, are the apples that they should not have bitten into.

As I mentioned a couple of days ago, at some point Google will cross over from innovative upstart to established incumbent, and many other changes will follow. I tend to agree with the assertion Arrington makes here: I think when that happens, which is a shift that will happen in people’s minds as much as in the corridors of the Googleplex, Google will find itself facing many more challenges than it currently does. And how it weathers that shift will be the indicator of whether Google is likely to be the next Altavista or Mapquest (companies which once dominated but then declined) or the next Microsoft (a company which, for all its faults has nonetheless remained tremendously dominant and very successful).

At the 2006 World Economic Forum in Davos, Switzerland, CEO Eric Schmidt discussed Google’s decision to censor its search results. During his speech, he mentioned that we used an “evil scale” to weigh our actions. Applying that scale, we concluded that to withdraw from China would be “worse evil” than participating in censorship.

Having received a number of queries about our evil scale, we present an explanation here. Our scale divides evil into 15 degrees because we like hexidecimal and because it’s convenient for representing shades of gray online. Also, we find that the shift from numeric to alphabetic characters is useful in separating bad things from those that are really terrible.

We determined that removing certain information from search results on Google.cn rates a 6 on our scale. Withdrawing from China qualifies as an 8. Disorganized information helps no one. In fact, it is a detriment to society. When all messages are equally probable, entropy is maximized: H(M) = log | M |. We are committed to fighting entropy by organizing the world’s information. Working with Chinese censors will help us achieve our goal.

I wonder how Google feels about this stuff. They don’t yet have the reputation of other large corporations like Microsoft and AT&T for being overly sensitive about criticism of their products and policies, but you do wonder whether they will eventually move in that direction. It’s tough for any big company that strongly believes in its own mission and attitude to take criticism. So far Eric, Larry and Sergey seem to be fairly level-headed about it - let’s hope they stay that way.

The keynote was everything you would expect it to be - well choreographed, lots of big announcements, the best left for last and so on. Even despite all the rumors, there were still some surprises in there, and the crowd seemed genuinely appreciative of the new applications which were demoed, even though those demos did seem to go on a bit long. The iPhone 3G is, like its predecessor, a phenomenal device, and when I hear people say it doesn’t do anything differently or better than other phones out there, I just find myself wondering if they’ve ever actually seen one up close and played with it. The thing is in a league of its own for me, in terms of design, user interface, browsing experience, email, applications and so on. The only things preventing me from getting one previously were speed, price, and the sense that a better version would probably turn up soon. Come 11 July, I’ll be first in line at my local AT&T store.

On the other hand, my personal experience with Apple over the last few months has been wretched. My hard drive failed a few weeks ago, and the process of getting it fixed was tedious to say the least. I had to make an appointment for technical support at my local store, they determined the hard drive had failed, but wanted to charge me to copy my files off it. So I declined, did it myself back at home, but then had to make another appointment to take it back in. Picked it up a few days later only to discover when I got home that they had forgotten to install iLife on it. Took it back again, etc. Finally got it home, reinstalled everything, moved images, music etc. back onto it, finally had everything back the way I like it, and then today had the same early symptoms as last time pop up again. The thing no longer starts under Mac OS X, only Vista.

So I called technical support, since my local store had no technical support slots left today, and spent a total of 2 hours or more on the phone with various different people trying to convince them that simply repeating the process I went through last time wasn’t going to reassure me that this wasn’t going to happen again. Their standard policy is that they will fix a device 3 times before allowing you to receive a replacement, even if it’s a hard-drive failure as it has been twice now for me. It wasn’t until I had kept some poor customer service person on the phone for a good 45 minutes repeating over and over again that the solution she was proposing was unacceptable that she finally transferred me to someone with more clout who was willing to concede that giving me a new machine was the right thing to do.

The contrast between these two experiences - the real excitement associated with a new product launch from Apple, and the sheer frustration involved with being a customer when a product goes wrong - almost couldn’t be greater. Is this the same company? Yes. But does their customer service match the high expectations they create through their carefully choreographed keynotes, flawless demos and clever advertising at the expense of the hapless PC? I’m not so sure.

We are Verizon customers for all our home services - TV, Internet and phone (I use a VoIP service from Vonave for my home office). In Boston, we signed up for FiOS broadband and then TV as soon as those options became available, and the experience was great from start to finish. Our set top box conked out at one point and someone quickly came to replace it. Even my wife loved the service, and she’s inherently skeptical of technology.

So, when we moved to New Jersey, we wanted FiOS again, but it wasn’t available. So we went with the local cable company until FiOS was available a couple of months after we moved in. We ordered it on a Wednesday, it was installed on a Friday evening, and by midnight on Friday both the Internet and telephone services had gone down. Not good news. So I called Verizon and asked them to come and fix it. To cut a long story short, it took four days and four calls to technical support to get someone out to fix it. It was a holiday weekend and the biggest problem was that the Verizon technical support people simply weren’t able to reach anyone in the local offices here in New Jersey to arrange an appointment. They had to keep promising to call me back, which they never did. The whole thing was hugely aggravating and a big contrast from our experience in Boston.

Then, this past weekend, there was a thunderstorm on Saturday evening and at one point we heard and saw a very loud and bright lightning strike very close to the house. It later turned out that it had been close enough to have fried both the guts of our FiOS service and our FiOS set top box, such that all our services were down. It was late by the time we figured this out, but I called Verizon to set up something for Sunday or Monday. At that point I was told the wait to talk to a representative was long, but I used an automated system to record the fact that I was having trouble, and was informed that someone would contact me by noon on Sunday to rectify the situation. I provided my cellphone number and hung up. However, no contact by mid-afternoon on Sunday and so I called again. The same automated system again tried to persuade me that it would provide better service than a human being and came up with the response, “we are committed to fixing your service by Sunday. Is there anything else?” This wasn’t terribly helpful, since I hadn’t told anyone what the problem was, let alone arranged a time and date to have it fixed. So I said yes, there was something else, and got to talk to a person. They arranged for someone to come the next day (Monday) and sure enough someone was here by 10am and fixed everything by noon. Although the IVR system still leaves something to be desired, they got things fixed quickly, the guy who came was efficient and professional, and we were very pleased.

Then, on Tuesday, we were meant to have a new set top box installed. I had found the online ordering system too vague to be sure I would get what I wanted, and so I called to place the order. I told the person I talked to that I had seen online appointments were available on the following Tuesday, and we arranged to have the installation done then. I was given a four-hour window and and order number and hung up. That window came and went yesterday but no-one showed up. So I called, and was first passed around three different people, each of whom merely told me they were putting me on hold (not transferring me) and I had to re-explain my situation every time. Ultimately, I found someone who didn’t transfer me while on hold and she told me first that they had no record of my order at all, and then that the local office had it booked in for a Tuesday two weeks away (apparently, data entry error on the part of the person taking the order). So they apologized and asked me when I would like to reschedule the installation for. I gave them some dates and they said someone would contact me to let me know when it would be. Then, today, a set top box arrived in the mail. No letter, no explanation, just an STB.

What the heck? Why isn’t the service we have sometimes received from Verizon the service we receive all the time? And how hard can it be to get this basic stuff right? If Verizon were consistently as good as they sometimes are, we’d be phenomenally happy. But since they screw up in some way at least once out of every two times I need something from them, we’re decidedly unhappy. Unfortunately the cable company is no better, so we’re somewhat stuck. But there has to be a better way, and I would hope that Verizon, which has lowered its churn to industry-leading levels on the wireless side, can find a way to keep its wireline customers just as happy.

Work Isn’t Their Whole World: Sure, they’re going to go to work, but it had better be fun. For Gen Y, work isn’t their identity. It’s just a place. Gen Y sees no reason why a company can’t be more accommodating, offering benefits like the ability to work from anywhere, flex-time, a culture that supports team communication, and a “fun” work environment. They’re also not going to blindly follow orders just because you’re the boss. Sometimes dubbed “Generation Why?” they need to “buy in” as to why something is being done. Old school bosses may find their questioning insubordinate behavior, but they would be best to just change their management techniques and adapt. Gen Y hasn’t known much unemployment and they’re not going to put up with being treated poorly just for sake of a paycheck. (Bosses, your survival guide is here).

I’ve seen similar remarks made about Generation Y in the context of the tools this generation will use in the workplace. Instant messaging, text messaging, social networking and other technologies, and not email or phone calls, are the way this generation prefers to communicate, but the most controversial assertion for me, which is repeated in the excerpt above, is this idea that companies, and not these junior employees, are the ones that will need to change.

When the rest of us older folk (relatively speaking) arrived in the workplace, we were handed the tools we needed to do our jobs, which likely included a desktop PC with email and (depending on how much older we are) Internet access, and a deskphone, and told where the stationery cupboard was. We didn’t expect to use our personal tools in the workplace, and absolutely expected to conform to what our employers told us and not what we thought we should do. Why should this generation be so different?

The negative reason seems to be that this generation might also be called Generation Spoiled. Parents, teachers and others have bought into the ethic that there’s no wrong answer, that children need always to be nurtured and given positive feedback and not criticism, and so on. I worry that this attitude to giving Generation Y what it wants in the workplace is a continuation of the spoiling of this generation, and that they’re going to go through life with a sense of entitlement as a result. Will they in turn pass on that same attitude to the next generation (Generation Z?) ?

There are two better reasons for this attitude. The first is that, in order to attract the best and brightest among this generation, companies feel they have to offer the most flexible and congenial working environment possible. To an extent, this actually makes a lot of sense, since they will be actively competing with other employers for those employees, who will choose their first employer partly on the basis of their perceived enlightenment on these matters. In practical terms of course, the companies which are most attractive to these candidates probably already have practices which meet these criteria - think Google, Yahoo! and others.

The second reason is that this trend is part of a much bigger shift in power and in the flow of technology. In the past, including when most of Generation X joined the workforce, new technologies were often experienced in the workplace, whether fast computers, Internet access (and then broadband), mobile phones, email, and so on. However, many of the more recently available technologies have been experienced first in personal life - instant messaging, even faster Internet access, social networking, mobile messaging, video calling and so on. Because this is a much wider shift, although Generation Y may be the first to have grown up in it, all subsequent generations will bring the same experience with them, dragging their personal tools into the workplace because their personal lives are where the innovation is taking place now. We might call this a “c2b” trend, reflecting the fact that technologies are moving from consumers to business rather than the b2c model we’re more accustomed to.

Most of what I’ve said in these previous two paragraphs applies more narrowly to the technology tools Generation Y will expect to use and not as broadly to their attitude to work in general, which still strikes me as more spoiled than enlightened. I think there are some good reasons for empowering these younger employees to use the tools they will work with most effectively, but I’m not convinced that we need to mollycoddle them. In a time of small or even negative economic growth, it seems to me that these employees need jobs at least as much as employers need bodies, and they should be treated accordingly.

From the mailbag:

Dear Mr. Pogue: Can you explain why big sites like Adobe and Microsoft list download times for 56k modems?

I can’t image that 56k modems are used by the majority of U.S. Internet users (or even in the Western world, really). Wouldn’t it make more sense to tell us what the download time would be for a DSL or cable connection (various speeds)?

I believe my reader is correct: dial-up modems now represent well under half of U.S. Internet users.

Do Web sites list dial-up download times on the premise that dial-up users are the only ones who care how long it will take?

My guess in answer to this question, incidentally, is that probably no-one is responsible for reviewing that policy from time to time to see if it still makes sense. It’s probably apathy as much as anything else that’s keeping those download times in place.

The second is a Wall Street Journal column about landlines. Again, an excerpt:

In last week’s Real Time column about cellphones, I wrote that “a call on my landline is almost certainly a wrong number, a charity or a recording of a politician.” Which led one reader to ask a very reasonable question: Why keep the landline?

The answer, unfortunately, involves throwing my wife under the bus: She’s the one who wants to keep it. But her reasons are pretty good: She notes that our cellphones aren’t charged “half the time,” which I’d dispute specifically but not generally; we have a good phone number that’s easy to remember and to dial; and we’re listed in the directory, without which there’d be no way for people who’ve lost track of us to find us. When I said people would just Google us, she said “I’m an old fogey, what do you want?” which is a kinder version of “Shut up, dear.”

Let the record show that my wife is in no way an old fogey. But the record also shows that the tide — at least in the U.S. — is running against her. A report released last week (see the PDF here) by the Center for Disease Control and Prevention paints a picture of a rapidly vanishing landline business. In the last six months of 2007, at least 15.8% of U.S. households had at least one wireless phone but no landline, and 14.5% of adults — 26 million — lived in a household with only wireless phones. (The CDC’s first such survey, conducted in the first half of 2003, found 2.9% of adults living in wireless-only households.)Throw in the 2.2% of households that had neither wireless or landline phones and 18% of U.S. households are without the traditional phone service that was part of our common culture for generations. Landline phone penetration is now what it was in the early 1960s.

The point is that both of these articles are about technologies in decline. In the case of dial-up, of course, it’s a much newer technology that is nonetheless much further along in the decline - only a small minority still have dial-up Internet connections, whereas landline owners are still by far in the majority. But in both cases, those technologies are going to reach the point where networks and services are being preserved for a smaller and smaller number of customers. At some point, the providers of those services will have to flip the switch on those services to “off”.

They’re not the only such services, and it’s a tricky thing to grapple with. We’ve recently seen the switch-off of AT&T’s TDMA network, and in early 2009 we’ll see the shutoff of the analog TV network. Sprint has caused some problems for itself by providing an off date for its legacy business networks, giving its competition some easy ammunition. At some point, all companies will reach the point where the cost of maintaining these networks for the laggards is outweighed by the benefits of forcing a switch, but the trick is always calling that point accurately. And the downside is getting it wrong and causing a huge customer service and/or sales problem. Luckily, landlines are going to be around for quite some time, but that dial-up market is going to be heading for the chop rather sooner. When does AOL flip the switch on that?

I did a search for the name of the company I work for, Ovum, which yielded mixed results. Some of the hits were definitely about the company and were therefore relevant, while about the same amount were about something or other to do with a human egg going through the process of fertilization. (Note to anyone thinking about naming their company after a biological term: please don’t - bad idea, and not just because of the Google searches.)

But at any rate, it’s a useful tool when it works. I’ve seen posts quoting Ovum research, people pointing out news about Ovum, even one of our editors saying that we’re desperately trying to hire more of them. The best thing about Tweetscan, though, is that you can set it up as an RSS feed. So instead of obsessively checking once a day or once a week to see if there’s anything recent (or more likely, forgetting to check for weeks on end only to find out that someone slandered you last month and it’s all over the web already), you can simply subscribe to the feed for your search, and then check it along with the rest of what’s in your RSS reader. Nifty stuff.

I’ve had it set up in my Google Reader subscriptions for a couple of weeks now and there’s been something in there at least every couple of days. Apart from anything else, it’s been a fascinating way of telling which other Ovum employees use Twitter, and which other people that work with Ovum do as well. I highly recommend it. Summize is another service which offers some similar features.

As I mentioned in the conclusion of Microsoft 2.0, I had just submitted the final version of my book manuscript a week before Microsoft announced its $44 billion bid to buy Yahoo.

Disbelief was followed by utter despair — and not just on Yahoo CEO Jerry Yang’s part. All I could think on February 1 was I was going to have to go back and revise every single one of my 300-plus pages.

I did go back in and update my chapters to reflect the possibility Microsoft might end up buying Yahoo. Then I revised again to say Microsoft did buy Yahoo (given that much of the press in February made it sound like it was pretty much a done deal). Right before my drop-dead go-to-printer date, I revised one last time, saying that Microsoft might or might not buy Yahoo.

Well, as we now know, on May 3, Microsoft withdrew its takeover bid, after being unwilling to meet the higher per-share price that the Yahoo board was demanding.

So this poor woman completed her book on Microsoft, then the Yahoo! bid was announced, she made a bunch of changes to incorporate the seemingly inevitable acquisition and submitted the final version, and then Microsoft called the whole thing off. What a miserable experience, and presumably one which will greatly damage sales of her book.

But all this makes me wonder how much it’s really possible to predict the future in the world of technology. If a week is a long time in politics, it can sometimes be an eon in tech. We’re being asked now for our research publication plans for 2009. The year won’t even start for another seven months, and won’t end for 19 months, and yet we’re supposed to predict the broad outlines of what we’ll publish that far ahead. I just can’t imagine that we’ll be able to do an accurate job of forecasting what’s we’ll publish in late 2009, and yet clients will not doubt want to hold us to at least some of it regardless of whether it’s the most relevant or interesting research to be publishing that far down the road.

Of course, we publish forecasts with a five-year time horizon and generally think we have a good handle on future trends. And in terms of Internet penetration, or wireless subscribers, or MPLS ports, that’s actually fairly straightforward to do. Occasionally, we might buy into the hype around a new product or service too much or underestimate the growth in an unexpectedly hot market. But on the whole those long-term product and service trends are relatively straightforward. They tend to grow in a steady fashion after they cross the famous chasm and so are relatively easy to predict with a reasonable degree of accuracy.

But predicting industry news, actions of specific players and especially mergers and acquisitions is much more art than science, and would take a real crystal ball and not the analyst’s metaphorical one to foretell accurately. This is why it’s important in our job as analysts to separate one from the other. We can still do the forecasting bit, and we can certainly talk about whether it would be wise for a particular company to pursue a certain course. But we shouldn’t really be in the business of predicting decisions or performance by a particular company unless we have real inside information (in which case we probably shouldn’t anyway).

We all have a lot of work to do in providing balance between these various things that we do, but we also need to be honest with our audiences about what we can reasonably do and what we should leave to others more willing to peddle their fortune telling skills.

Well, I’ve just come away from Sprint’s analyst event and it’s been a mixed bag. On the one hand, it’s always good to get a deeper dive into everything a company of Sprint’s size is working on - there’s always a lot more beneath the surface that you just can’t get into in one evening’s discussion over dinner, and some of that detail is reassuring and impressive. On the other hand, there were other things - some specific initiatives but also some themes and trends which emerged over the day and a half of the event - which were more worrying.

On the positive side:

• Sprint has three clear strategic priorities: fixing the customer experience, establishing a clear brand in the market, and focusing on profitability. This clarity of purpose and focus on fundamentals is a good thing, and the key will be to execute on it without adding a raft of additional initiatives and programs over the coming months. Sprint needs to get the basics right before it gets distracted again.
• Accountability is being pushed down throughout the organization, with four business units each having their own P&L, and customer satisfaction in particular being made a component of bonus structures for everyone except salespeople. This is a big and positive change from the previous administration.
• The iDEN network’s capacity problems have been fixed, partly because so many customers have left but partly although through targeted investment and a better approach to managing capacity. As such it is now performing at ‘best-ever levels’.

These are all important steps, and the key will be consistency in sticking with them.

But on the negative side:

• In many of the conversations over the past couple of days, I got the sense that Sprint is relying heavily on its WiMAX initiative (soon to be Clearwire) to fix many of its problems. It was a bullet point on so many of its slides. But it won’t make a meaningful contribution until late 2009 at the earliest, and even then the scale of that contribution is up in the air. It worries me that it seems to be something that Sprint is relying on so much.
• To a much smaller extent, Sprint used its forthcoming Samsung Instinct device as an indicator of several of its key initiatives. I believe they’re using the one device to represent a wider range of devices, but it was worrying how often that one particular device was used, and how few other groundbreaking devices Sprint has in the pipeline. It was used to illustrate Sprint’s commitments to  openness, innovation, usability, and touch screen devices in general, and it is Sprint’s main answer to the iPhone, but I believe it falls well short of the iPhone in a number of key ways. And that’s a little worrying too, because it suggests Sprint is banking on a single device too much, and also that it isn’t able accurately to gauge its position in the market.
• Sprint also appeared to be in denial about its competitiveness against Verizon and AT&T, its two major competitors in the business market. Its proposed differentiators - even in future - were things it has claimed to be doing for the past four or five years, with the key thrusts being WiMAX (again), convergence (which was once a differentiator but no longer is) and flexibility (the flip side of being sub-scale) - something there is some merit in, but probably not a key element of its differentiation strategy. I believe Sprint faces substantial competitive disadvantages against these two companies in particular and I don’t see any way for Sprint to overcome those in the short term.
• Because of all the trouble Sprint has faced, it has less money to spend on advertising and investment in its business, and it continues to suffer all the effects of running multiple networks. These problems are insurmountable in the short term (especially without a Nextel spinoff) and simply compound the other problems.
• The new “Now Network” tagline is nowhere near as easy to comprehend as Verizon’s or AT&T’s key messages, which are immediately understandable and compelling to any ordinary user. Even the next level of detail - around speed and usability for data services - doesn’t lend itself easily to a one-line pitch to consumers. And so even though Sprint is clearer about what it means than it was in the “most powerful network” days, I’m not sure its customers will be.
• In several of these areas, perceptions still lag reality. The iDEN network - both in terms of reliability and Sprint’s commitment to it - still suffers from negative perceptions which are arguably no longer in keeping with reality. But Sprint is also still suffering from the lack of clarity about its positioning in the market, despite its formidable network assets, customer base and heritage.

For all these reasons, even though I’m positive about Sprint’s potential to turn things around, I’m not yet convinced that it will actually be able to turn things around and in many ways the deck still seems stacked against it. But I think the leadership team and basic strategy are in place to give it a great chance at success if execution finally matches the strategy - something that has been sorely lacking at Sprint for the last several years.

It appears Google is using one beta service (Google Spreadsheets - specifically, the feature which allows you to use forms to create spreadsheets for databases) to register for another (FriendConnect). As a result, “something bad happened.” This probably isn’t best practice for a hotly-anticipated new service from Google, much as I understand the urge to eat one’s own dogfood, as it were. Wouldn’t a standard web form with a more robust backend have done the trick?

At any rate, I’m looking forward to trying out the service if and when I can get it working. Looks like an interesting approach to “socializing” non-social networks, but a lot will come down to how it works in practice. I’m also looking forward to trying the other similar initiatives that were somewhat suspiciously all launched within a few days of each other (MySpace Data Availability and Facebook Connect).

Five years into the video-over-the-Internet revolution, we have learned two things. First; consumers won’t pay for content on the web, so it will have to be ad supported. And second; it won’t be ad supported.

This is the main thrust of the argument, again from Moffett:

In the cable TV network world, half of all revenues come from affiliate (carriage) fees paid by the Comcasts and DirecTVs of the world. The other half comes from advertising. But in the TV world, a typical half hour show supports an ad load of about 8 minutes.

On the web, early evidence suggests that consumers will tune out – click away – if they are forced to watch more than 30 seconds or so of advertising up front, and maybe another 90 seconds of advertising over the next thirty minutes. Hulu.com, for example, which has already been lionized by many as the future of TV, serves two minutes of advertising for every 22 minutes of programming (i.e. the programming duration of a typical half hour show from television). Assuming identical CPMs for web video and TV, and after accounting for lost affiliate fees, a 30 minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer.

Are content producers prepared to reduce production costs…by 88%?

In fact, the actual economics of web-based video are far, far worse than this. Our 88% decline ignores the corrosive impact of à la carte on traditional video economics. In the public debate in Washington, the phrase à la carte refers to the idea that a few strong networks demand the carriage of a host of weaker ones, effectively subsidizing a much larger family of channels. But there’s a much more important aspect of web-based àla carte that is rarely mentioned–that is, the “à la carting” of the few best shows from the rest of the day’s schedule. Or even worse, of the best few moments (news stories?) from the rest of the show. On the web, watching SportsCenter not only robs ESPN of its ability to pull through carriage fees for ESPN Classic and ESPN U (and SoapNet and Toon Disney), it also, and much more importantly, robs ESPN of its ability to use SportsCenter to support the economics of the rest of the 24-hour ESPN schedule. And watching just the best 30 seconds of SportsCenter robs ESPN of its ability to support the economics of… well, you get the idea. Expecting a few ad supported shortclips on the web to substitute for the affiliate fee revenues lost by multiple networks 24 hours a day is lunacy. “

The irony is that all this is happening at the same time as telcos, and especially mobile operators, are attempting to build significant new revenue streams based on advertising. As I’ve posted on a couple of previous occasions, advertising itself is under threat. Customers don’t like it, they bypass it whenever possible, and when they’re offered opportunities to skip it entirely, such as those offered by DVRs and video on demand, they do.

The TV industry needs to realise this, and realise it quickly, and it needs to make some significant adjustments. More of the revenue will need to come from direct payments from customers - whether subscriptions or on-demand fees - and less from advertising. This may mean increasing prices of both subscription and on-demand options, but it may well also mean producing less overall content. Whereas the Internet is said to have enabled the long tail of content and media, this trend actually argues in the other direction.

When the stuff of niche interest is no longer cross-subsidized by the stuff of broader interest, it will no longer get made, because there will no longer be a way to fund it. Everything will have to stand on its own, because the costs of production for a TV show are far greater than the costs of production of an individual music track or the other items for which the long tail theory works. This may well mean less documentary and other fact-based content and more big-bang, high production value content, which is probably a bad thing. But it will also mean that networks become a lot more selective about the kinds of things that get funding, so it may also have a beneficial effect in reducing the amount of trash we’re subjected to.

Without a doubt, this is a long-term trend, and not a short one, and we’re in the very early phases. But over the next few years, the adjustments the TV industry will have to make will be at least as significant as those the music industry is already having to make, and probably much more so.

Sprint is said to be contemplating a couple of options for Nextel. The company has held preliminary talks with Nextel founder Morgan O’Brien, who now runs a company called Cyren Call Communications in McLean, Va., that is trying to create a nationwide wireless network for public-safety communications.

is very similar to a scenario I considered in a post a while back:

It would make a lot of sense at this point to cap investment in the Nextel network, build a robust replacement Direct Connect product on the CDMA side, and invest there instead. Then, in time, either shut the Nextel network down or sell the rump to a specialist public safety provider. What Sprint needs now more than anything is focus on the one hand and a single network, single brand and single device portfolio to drive some serious synergies and efficiencies on the other. Keeping the Nextel network alive indefinitely feels like an act of desperation at this point. [emphasis added]

Nextel is the bear on Sprint’s back right now, and unless it does something to get rid of it, it’s saddled with several big disadvantages in competing against Verizon, AT&T, T-Mobile and even some of the smaller players:

• having to maintain a combined portfolio that is either considerably larger than competitors’ - if it wants each brand’s portfolio to be competitive - or maintain a portfolio a similar size to competitor’s in total, but therefore be uncompetitive within each brand (it appears to be pursuing the latter strategy)
• maintaining a level of investment in networks considerably above that of others because it is maintaining two separate networks
• trying to compete while spending a smaller amount on advertising than competitors while attempting to boost (no pun intended) the visibility of two or more brands
• trying to maintain two rather different customer bases and differentiated messaging and branding for both sets of customers and potential customers.

All of this is on top of the problems the company is already dealing with, although most of those problems stem from the merger in one way or another. Although disentangling Nextel would be difficult and painful it may well be the right thing to do. As long as Sprint has these problems to deal with it’s hard to see how it can ever be truly competitive again.

At the same time, there are rumors about a possible renewed deal with Clearwire. Again, getting Nextel out of the way would allow Sprint to really focus its attentions on investing in the next generation of the core Sprint network, which is a big gamble in its own right.

On Friday, Google urged the FCC to block Verizon Wireless’ $4.7 bil. successful bid for the C Block band of spectrum in the recently completed 700 MHz auction unless Verizon is forced to agree that open access rules apply to handsets it provides its own customers. Specifically, Google claims that Verizon Wireless has no intention of abiding by the open access rules governing the C block spectrum for devices it gives to its own customers and that the FCC should condition Verizon’s grant upon a clear commitment that Verizon will not exclude these handsets from the requirement.

This echoes in reality what I had said might happen in a previous post a few weeks ago:

…isn’t Google mistaken here? Is it assuming that the FCC’s open access rules go further than what Verizon Wireless had already agreed to do? The FCC’s rules are unfortunately vague, and it may be counting on a more favorable interpretation of them than Verizon is.

Google and Verizon have had conflicting opinions on the meaning of the FCC’s open access requirements - each taking the position that most clearly reflected its own views - Google’s being the most expansive interpretation possible, and Verizon’s being the most minimalist. However, in my previous post, I pointed out that even though the rules are vague, they certainly strongly suggest that Verizon will have to go beyond its existing open access project. For example:

Wireless service providers subject to this requirement will not be allowed to disable features or functionality in handsets where such action is not related to reasonable network management and protection, or compliance with applicable regulatory requirements. For example, providers may not “lock” handsets to prevent their transfer from one system to another. We also prohibit standards that block Wi-Fi access, MP3 playback ringtone capability, or other services that compete with wireless service providers’ own offerings. [emphasis mine]

At any rate, looks like we’re in for more fun and games, and more uncertainty for Verizon and its customers. Not what anyone would have wanted, and it could all have been avoided if the FCC had just been clearer about these requirements up front. Verizon can now reasonably argue that it bid based on its understanding of these rules and it’s too late to change that understanding now.

Deutsche Telekom AG is weighing a bid to acquire Sprint Nextel Corp. that could catapult the German telecommunications giant’s wireless arm, T-Mobile USA, to the No. 1 position in the U.S., according to people familiar with the matter.

Well, yes, technically, it would put the combined entity in the number one position in terms of subscribers, but Deutsche Telekom would have to be absolutely bonkers to consider such a move. Sprint is already suffering from its inability to merge two incompatible networks (iDEN and CDMA) - DT would have to be a total glutton for punishment to add a third, also incompatible, GSM network to the mix. Of course, you could add in WiMAX and make it four…

The theory is that Sprint’s depressed share price makes this an attractive purchase, but even so it would be a huge nightmare to merge these companies together, and would require some really dramatic changes to even begin to make it work. I say this even though I’m still somewhat confident things can be turned around at Sprint in the long term. I think that there is potential for growth again in the next year or two, and the WiMAX rollout, though risky, might just pay off too.

I know Deutsche Telekom is hugely dependent on T-Mobile’s growth to offset the mess at home, but of course this move would also take that trend in the wrong direction, dragging down the company’s overall growth path without providing any obvious benefits. Any synergies would be outweighed by the amount of investment needed to reconcile the three different network operations. The timing is also odd, since T-Mobile has supposedly now completed its 3G buildout and is getting ready to launch 3G services in June. I just have to hope that this is one of those rumors cooked up by a journalist on a slow news day and that it passes just as quickly as it has come.

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.

This was a major theme from the event and one that got a lot of coverage at the time, though things had been fairly quiet on that front since. Well, today Qwest announced that it had signed a deal with Verizon Wireless. But rather than tighter integration, Qwest has gone for a far looser integration, and has taken another step back from direct participation in the wireless market. In the space of just four years, it has gone from being a wireless player in its own right to being an MVNO to being a reseller:

Qwest Communications International Inc. (NYSE: Q) and Verizon Wireless announced today they have signed a 5-year agreement for Qwest to market and sell Verizon Wireless service beginning this summer.

…

Under the agreement, Qwest customers will have access to the full line of Verizon Wireless handsets, smartphones and BlackBerry devices, as well as high-speed broadband wireless services for e-mail, Internet access and multimedia services. Residential customers will be able to choose “wireless only” and be billed directly by Verizon Wireless, or include Verizon Wireless service as part of a Qwest bundle with their home phone, Internet and video services, and receive one bill from Qwest for all services.

Ed Mueller had said in my conversation with him that, in the TV market, Qwest was perfectly satisfied to merely take commissions from its satellite partner, rather than participating directly (according to that conversation, these commissions are around 15%). It now appears that Qwest is willing to take exactly the same approach with wireless. Having recognized that it doesn’t have the skills to compete in this market itself, it is hitching its wagon to a player that can. But again, it is limiting its upside in one of the few markets that are still really growing. Once again, it appears that Qwest is not all that concerned about growth.

In the meantime, this is somewhat bad news for Sprint, which will have to cope with the loss of one of its resellers (albeit not the largest) and the expansion of Verizon Wireless’s ability to compete through bundling with wireline products, on top of all the other bad news it’s had recently.

Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number
of reasons[.]

In essence, it was Yahoo!’s pursuit of the search relationship with Google over the last several weeks that put a real spanner in the works. To Microsoft, the whole point of the deal was putting up a stronger competitor to Google in the search marketplace, so cozying up to Google was the last thing Yahoo! should have been doing. So it appears that Yang’s decision to go down this route actually served two purposes - it put Microsoft off, but it also provided a way to improve the financials in Yahoo!’s search business, at least in the short term.

Of course, if you’re a Yahoo! shareholder, you would probably say that you’d have taken Microsoft’s 70% premium over any short-term boost in results and the mere possibility of an improvement in the share price over the medium to long term. Even though Microsoft won’t now pursue a proxy fight to replace the board, shareholders may decide that they want someone running the company who will put their interests first. Employees, on the other hand, and customers, will probably breathe a huge sigh of relief. But Yahoo! still has a long way to go to reassure either set of people.

After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal

This is a little odd, because Microsoft had made no secret of its plans to take the bid hostile if it were rejected, and had gone so far as to select board members for a proxy fight. Backing out now because of what Yahoo! was “demanding” therefore seems a bit suspect. It appears much more likely that Microsoft finally joined the board of Yahoo! and most of the rest of the opinionated world in recognizing that the deal was a bad idea. But it’s taken a surprising amount of humility from Steve Ballmer (not normally the most humble of people) to back out at this point, even if Microsoft is wrapping that humility in another explanation.

There has been speculation about what Microsoft might do if its bid fell through for whatever reason, with one of the most interesting alternatives being that Microsoft would go out and buy a slew of companies with the money it would have spent on Yahoo! I’m not sure it makes sense to spend a ton of money just because it had planned to, but it’s certainly possible that Microsoft could use some of its substantial war-chest to make some more purchases.

However, what Microsoft really needs at this point more than anything else (even and perhaps especially as it acquires more companies) is a change in culture, to move more quickly to embrace new business models, and to begin to make the shift from the offline to the online world in its software business. It needs to learn a few tricks from Yahoo!, Google and others in these areas. Otherwise, the risk is that it continues to fall short in everything it does, doing just enough to be a participant in markets without ever leading them. It’s doubtful that this change will happen anytime soon, but perhaps the Yahoo! failure might turn out to be a cause for re-evaluation at Microsoft.

One of the themes that has arisen several times, and which figures to be a pretty large component of our wireline strategy research in particular is “Transformation.” This isn’t a term I’ve come across a lot in my work over the last few years in the enterprise space. But as it turns out, it refers to a set of things I’m already pretty familiar with, and in essence relates to the process through which telcos are shifting from their legacy structures, mindsets and services to new structures, processes, infrastructures, networks, services and so on. As such, it encompasses several major areas:

• Network transformation - the shift from PSTN to IP, and the introduction of IMS and common platforms in place of a raft of dedicated platforms for various different services
• A greater focus on marketing and serving customers as the core business of the telco, and a smaller focus on technology and running networks
• As a result, it often also involves the outsourcing of management of network operations to third parties, most commonly network equipment vendors. We met with representatives from Alcatel-Lucent and the CTO of Telstra as they came to visit our London office, and the Telstra CTO remarked that he’d noticed this trend was most prevalent in countries with populations under 20 million (Australia, New Zealand, Belgium and others are current examples).
• Next-generation access, or in other words fiber in the access network. FTTH, FTTN and other architectures and services are used to deliver a range of services, often as a triple play bundle of TV, telephone and Internet access.

I think what we’ll be focusing on is how carriers are approaching these various tasks and how far along they are. I imagine there might well be scope for some sort of transformation scorecard at some point which would formalize this. Telstra is actually one of the carriers which seems to be furthest along in its plans at this point, and which has a clear roadmap for achieving the rest. BT and Bell Canada are other examples of carriers which have aggressively approached at least some of the elements of transformation. I’m looking forward to embracing this as a theme in my new role. I’d be interested in your thoughts and comments on what would be useful to our customers.

In fact, it seemed as if none of the companies really ever invested anything significant in the venture beyond the initial outlay to set up the entity which ran it. Cable company call center representatives were not apparently paid commission on Pivot sales and thus had very little incentive to sell the service when they had plenty of other options to pursue with their customers. It also never really made it out of the initial test markets.

There clearly are people who want to watch TV on their handsets, and there are even people (myself included) who would like to be able to set their DVRs from their cellphones. But that doesn’t mean they want a service which revolves around those features. And they especially don’t want a service which feels like it is tied down to a particular feature set and a secondary relationship which they may or may not want to keep over the long term.

This is the same problem which doomed Mobile ESPN - people want ESPN content on their phones (the Sports Center audience numbers don’t lie, and they pretty much all have cellphones), but they first and foremost want great phone service, good prices, attractive devices, good customer service and so on. Then they want to be able to layer that other stuff on top, and add and remove it as necessary over time, whether for financial reasons or just because something better has come along.

Even though mobile services tied into quad plays from telcos have been more successful, they haven’t been hugely so, and it comes down to the same reason. People want to make an individual decision about mobile phones that is decoupled from the other decisions they make about communications and media services they subscribe to. The two-year contracts they’re locked into are quite enough restriction for most people, and they don’t want any more.

It appears the cable companies realize that, and perhaps always have. Although the logic of the partnership was sound at a high level - the cable companies have everything except wireless, and Sprint had only wireless, in a world which appears to be moving towards bundles - but that logic breaks down once you get into the details. People are buying bundles, but they’re buying bundles of home services and not typically bundles including mobile.

The cable companies, though, still feel they need a play in wireless, if not because of the bundling trend, then for two other reasons: other companies are offering mobile TV services, which may erode their share at the margins, and because they are experiencing the same slow-down in their core business that is driving the telcos in their bid for TV- and mobile-driven growth. They need wireless as a source of growth, even if not a source of higher ARPU from each individual customer.

As such, it appears they’re making some moves to get back into the wireless market via a more direct route. Having acquired AWS spectrum, some of them also acquired 700MHz spectrum in the recent auction.
There have been unofficial rumors that the cable companies may be planning to do a deal with Google, Sprint and Clearwire to build a national WiMAX network. And Comcast has apparently hired the former CTO of Telefonica O2 Europe to investigate options for the company’s wireless strategy.

There’s no telling at this point whether they will be successful this time around - joint ventures are notoriously bad at working out. But with the cable companies more in control of their own destinies they probably have a better chance with this than they did with Pivot.