Friday, August 31, 2012

"Not Much Happening" in U.S. Broadband? Really?



The National Broadband Plan, which was released two years ago, says that there should be a minimum level of service of at least 4Mbps for all Americans. "Since then, not much has happened," some would say
But the Federal Communications Commission says "we found that the average speed tier that consumers were  subscribing to increased from 11.1 Megabits per second (Mbps) to 14.3 Mbps, an almost 30 percent  increase in just one year," in its Measuring Broadband America report. "The actual increase in experienced speeds by consumers was even greater than advertised speed, from 10.6 Mbps to 14.6 Mbps, representing an almost 38 percent improvement over the one year period."
You can make your own assessments of whether anything has happened in the last two years. 

FCC Might Limit Spectrum Holdings to Regulate Competition

The Federal Communications Commission could overhaul the way it measures competition in the wireless industry, The Hill's Hillicon Valley reports. Those measures could include both quantitative limits (total amount of spectrum) as well as qualitative standards (how much of the "best" spectrum any single carrier owns or controls). 

According to the report, FCC Chairman Julius Genachowski plans to circulate an order with the other commissioners next week that would launch a review of the FCC's rules for analyzing whether any one company has accumulated too much spectrum. 

The commission is expected to vote on the proposal at its September 2012 meeting. 

T-Mobile USA, for example, has argued that the current method, which is quantitative, does not account for qualitative differences, such as ability of lower-frequency signals to penetrate walls, for example. 

"The present screen is inadequate as applied to the current wireless  market, particularly because it fails to recognize the vast difference in value between low (below 1GHz) and high (above 1 GHz) frequency bands, T-Mobile USA has argued. 

The Point is to "Be Good," not to "Feel Good"

There is a genuine difference between "being good," or "doing good," and "feeling good." Too often, we opt for the latter, instead of insisting on the former. Consider all-electric cars, something that makes us feel good and virtuous. 

There is a scientific argument to be made, though, that when electricity is generated by coal-fired plants, such vehicles do not actually make a positive contribution to carbon emissions. But it makes people feel good, even when they are not, objectively speaking, "doing good." 

Even when electricity is generated in some other lower carbon way, such as from windmills, there is no such thing as a moral free lunch. Wind farms kill birds and golden eagles. Perhaps that does not cause many qualms. But if not, neither will accidental killing of dolphins when fishing for tuna. 

The specific energy of gasoline — measured in kWh per kg, for instance — is about 400 times higher than that of a lead-acid battery, and about 200 times better than the Lithium-ion battery in the Chevrolet Volt. We should not expect batteries to rival the energy density delivered by our beloved fossil fuels — ever, many correctly would note

The point is simply that the important matter is to do good, not just feel good. If you want to lower carbon footprint, then lower it, objectively. Don't posture. Don't substitute "feeling good" for "doing good."

Why One-Sided or Incomplete Thinking is Necessary, and Eventually has to be Corrected

Generally speaking, executing on a strategy takes focus and concentration on a small number of things. Just as certainly, all businesses exist in environments that are complicated. So ultimately, even concentrating on "just one thing," or "just a few things," will eventually prove to be necessary but insufficient. 

Compared to the situation of perhaps four years ago, the telco strategic context needs to be considered in a broader or different context, according to  STL Partners. That is to be expected. Even a "big new idea" necessarily is incomplete as a prescription for organization success. 

So where the key point was the idea of "two-sided business models," STL now says that is something that has to be kept in context. Of course. That was true four years ago, as well. But organizations and people can only focus on so much at one time. So the unchanging requirement is to focus on a few things at a time, even if that is objectively "unbalanced" and "incomplete."

Have Tablets Overtaken Smart Phones as the Device with Star Power?

The Apple iPhone now drives revenue at Apple. But the iPad now seems to have become the product with more appeal.

While both tablet and phone historically enjoy good scores on YouGov's U.K. "BrandIndex," a measure of public's perception of well-known brands, the iPad now might have reached an inflection point.

On a couple of measures, the iPad now gets more attention than the iPhone, YouGov says. That suggests the point just about has been reached when the revenue contribution from the iPad could start to drive more of Apple's overall revenue success. 





Thursday, August 30, 2012

FCC Wants New Tax for Connect America Fund

Perhaps it comes as no surprise that the U.S. Federal Communications Commission wants to create a new tax on broadband access services to support its Connect America Fund, essentially the replacement for the older Universal Service Fund.

Aside from the change of nomenclature, the emphasis has shifted from guaranteeing voice services in rural and isolated portions of the country to supplying broadband access services to such areas.

“What started as a program with important goals (making sure rural farmers can make phone calls and ensuring the poorest among us can dial 911) turned into an unaccountable corporate slush fund,” says S. Derek Turner, Free Press research director.

Today USF is an $8 billion annual program, nearly quadrupling in size since its inception, with the bulk of those revenues going to landline and wireless phone companies.

Maybe this massive growth would be no concern if USF were a model program with a sterling reputation for efficiency. “But it’s not,” says Turner.

One recent study found that 59 cents of every USF dollar raised for rural networks was spent on administrative expenses and general overhead. A 2010 audit of the rural USF program found that one out of every four dollars sent to participating phone companies was an “overpayment,” with nearly a billion dollars unaccounted for.

So some would argue that higher taxes are unwarranted.

Phones Will Remain the Signature "Mobile" Device Through 2015

Smart phones will be the signature mobile device globally over the next five years, says Leif-Olof Wallin, a research vice president at tech analysis company Gartner. And Gartner thinks Microsoft will be the big winner, representing 20 percent of the market in 2015. 

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While the global mobile market as a whole is shrinking, smartphone adoption will continue to explode.

Mobile U.K. Shoppers Still Prefer to Buy Using a PC

U.K. Internet users are comfortable using mobile devices for researching and browsing products, but they still prefer to turn to a PC when it’s time to buy, a study by Kenshoo and publishing and events company Figaro Digital indicates. 

That study mirrors in key ways the findings of a Google study that suggests as many of 90 percent of people use multiple devices when shopping, for example.

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The preference for purchasing using a bigger-screen PC is pronounced when looking even at research activities such as clicking on paid search ads. 

Some 11 percent of all paid search clicks in the United Kingdom in the first quarter of 2012 came from mobile devices (not including tablets), the Kenshoo study suggests. Another 5.8 percent of paid search clicks came from tablets. 

Computers accounted for the lion’s share, at 82.8 percent, according to U eMarketer

But actual transactions are more likely to be conducted on a PC. More than nine in 10 said they preferred to buy using a PC, compared to three percent who would rather to do so on a smartphone and two percent on a tablet.

Why it is Difficult to Understand Mobile Payments

Some markets are hard to understand because the concepts are new or because a particular market is intertwined with other markets that also are changing. You might argue that unified communications has been that sort of market. 

But it also appears that mobile payments is that sort of business as well. At some basic level, the value proposition is unclear. Paying using a mobile device instead of cash or a debit or credit card doesn't always have immediate resonance as something that is 10 times better than existing methods of paying for retail purchases.

But part of the uncertainty is probably because retailing is changing. "Mobile commerce" is starting to show signs of merging with the broader "e-commerce" business, which in turn is starting to show signs of merging in a bigger way with physical retailing. 

In other words, m-commerce is merely another form of e-business or e-commerce. Mobile payment is part of the broader m-commerce business. So it might ultimately be the case that the specific value of "mobile payments" is clear only when the other parts of mobile commerce also are clear. 

But there is movement. Look back a decade. What was mobile commerce, really? Ringtones, initially, then downloaded songs and wallpaper. 

But mobile commerce now is viewed as something else, namely a way to use user location and analytic data, often in real time, to enable retail sales, also often in near real time. In some ways, that builds off of e-commerce, using new devices such as smart phones and tablets. 

In other ways, mobile commerce is both an extension of e-commerce and a bridge between physical and virtual retailing. If mobile payments doesn't make absolutely blinding sense, it might be because, right now, the value isn't so great. 

The value should become clearer as the broader mobile commerce trends, and the melding of physical and virtual retailing become clear as well. 

Wednesday, August 29, 2012

Illiad's "Free" Business is Hammering Rivals

Illiad's "Free" mobile service was intended to disrupt the French mobile market, and it seems, at least for the moment, that Illiad is succeeding. 

French conglomerate Bouygues posted sharply lower first-half profits for its second quarter of 2012, largely because of price competition from Free, which has caused the other leading mobile firms in France to cut prices. 

Bouygues also cut its annual profit forecast for its telecoms division unit by roughly 12 percent as a result of the expected competition, Reuters reports. 

Martin Bouygues, Bouygues chief executive, directly blamed Free Mobile for his company's woes.
"The difficulties we are experiencing are due to competition and the low prices charged by Free,"  the Bouygues CEO said. 

France Telecom, using the brand name "Orange," warned that it expects average revenue per user to fall by 10 percent at its domestic mobile unit Orange France in 2012, as operators engage in a price war following the entry of new low-cost operator, Iliad Group’s Free Mobile, in January. 

2.4 Billion Enterprise Smart Phone Subscribers in 2017

ABI Research estimates that by 2017, 2.4 billion employees globally will be using smart phones, growing about 17 percent a year and representing nearly three times more smart phones than used in 2012. 

Many hundreds of millions of those devices will be brought to work by people who want to use their own personal devices. So mobility suppliers and enterprises need to think in terms of serving all those employees with tools, apps, and services, even if not using company-issued devicesABI Research says. 

Android has the dominant leadership position among the global workforce expected to grow to 56 percent by 2017. 

90% of Content Operations Move Between Devices

Metaswitch Networks thinks a key to providing more value for communications service providers is to enable sessions using multimedia to be maintained as users move between networks, devices and locations.

“Immersive multimedia telephony” (“Accession”) enables a user to move a conversation or session freely between preferred devices, and to take advantage of local network connectivity or handset capabilities, while instantly sharing content that is related to the users' actions, surroundings or needs, Metaswitch says.

A new study by Google suggests people behave that way when consuming content or conducting search operations as well, so Accession might well be something important.

“The New Multi-screen World: Understanding Cross-Platform Consumer Behavior” study found that 90 percent of people move between devices to accomplish a goal, whether that’s on smart phones, PCs, tablets or TV.

Of the 90 percent of media consumed on a screen of any type, browsing, shopping, trip planning and financial operations make sequential use of mutliple screens, much as Metaswitch enables a user to maintain a voice session initiated on a business phone, transitioned to mobile, and then finished on a home phone.

There are two primary ways people exhibit multi-screen behaviors, the study suggests. Sequential screening is when people move from one device to another to complete a single goal. Simultaneous screening occurs when people use multiple devices at the same time.

The study found that nine out of ten people use multiple screens sequentially and that smart phones are by far the most common starting point for sequential activity.

So completing a task like booking a flight online or managing personal finances doesn’t just happen in one sitting on one device. In fact, 98 percent of sequential screeners move between devices in the same day to complete a task.  

With simultaneous usage, the study found that 77 percent of viewers watching TV with another device in hand. In many cases people search on their devices, inspired by what they see on TV, the report suggests.

Sequential screeners will start interacting with an application on one device and then pick up where they left off on another, so making experiences seamless between devices is key, the study suggests.

Additionally, cross-media campaigns can help brands make the most of consumers’ simultaneous usage across screens. The study also found that when people use screens sequentially to complete an activity, they often use search to pick up where they left off.

So not only is it important for companies to allow customers to save their progress between devices, they should also use tactics like keyword parity to ensure that they can be found easily using search when that customer moves to the next device, the study suggests.

The study found that people often turn to nearby devices to complete spur-of-the-moment activity. In fact, 80 percent of the searches that happen on smart phones are spur-of-the-moment, and 44 percent of these spontaneous searches are goal-oriented, the study says.

Accession mirrors the growing trend of multiple devices being used to accomplish one goal, a trend the Google study also tends to confirm.

             








Will U.K. Business Largely Abandon Landlines Within 5 Years?

Some 65 percent of 500 U.K. chief information officers surveyed by Vanson Bourne on behalf of Virgin Media Business believe fixed network telephones “will disappear from everyday use within five years,” Virgin Media Business says.

PCs are the next most likely to become redundant according to 62 per cent of CIOs. In contrast, smart phones (13 percent) are seen as the least likely devices to be abandoned.

If those opinions wind up being correct, whether the magnitude or timing of the changes are accurate, there will be shifts of opportunity for suppliers of unified communications, business phone systems, mobile and fixed network service providers alike.

Aside from depressing sales of business phone systems, there are potentially greater opportunities for providers of hosted alternatives, especially those providers whose unified communications services are well suited to use of mobile devices.

But the impact is likely to be disparate. Some workers might find there is less need for unified communications. But call center functions obviously will continue to require a high level of support.

Collaboration functions could shift to other media types.

But if the CIOs are accurate, business voice rapidly is shifting to mobile modes, for most workers, with obvious architectural implications.

Tablet technology, on the other hand, is seen as something of a fad by about 24 percent of companies expect the devices to fall out of fashion.

By the end of 2012, 70 percent of the U.K. population is expected to have a smart device reliant on mobile connectivity, Virgin Media Business argues. Already, in the past year the amount of data consumed on the Virgin Media Business network jumped to 765 billion individual bits of data being transferred every second, erasing the previous mark for the Virgin Media Business network by 27 percent, Virgin Media Business says.

Historically, one might have argued that the higher cost of mobile calling would make it an unlikely substitute for fixed network calling. But the differences are shrinking.

The wholesale price of calling mobile phones from a landline is set to fall 85 percent by April 2015, according to  the U.K. Competition Appeals Tribunal.

The Ofcom decision to reduce mobile termination rates will mean an estimated caller savings of about  £800 million. Mobile termination rates could mean the cost of calls, on a per minute basis, would fall from 4.18p to just 0.65p.

Apple will Create its Own Wireless Network with "AirPlay Direct"

Apple wants to improve the AirPlay wireless music streaming technology, which currently requires Airplay speakers and a WiFi network. The new version will require just speakers or a stereo system and an iDevice. Reportedly, the iPhone, iPod or iPad would form its own network to allow a direct connection and music playback.

The move is expected to be announced at the launch of the new iPhone, which is widely rumoured to take place on September 12, according to the Telegraph


In its current form, AirPlay allows users to stream video, music, and other audio from their Apple devices to an Apple TV or to AirPlay-enabled speakers. This ability requires a local Wi-Fi network.
Presumably, Apple is thinking about enabling new  third party speakers to build Wi-Fi capability directly into the speakers or a receiver so that the streaming signal can be received directly from an iDevice. 
In other words, iDevices will create their own Wi-Fi network, assuming there is a backhaul or access network the iDevice can connect to. 


How Important Has App Ecosystem Become?

[image]It is a given these days that a robust applications environment is essential for an operating system or device to attain huge success in the consumer market. What is less clear is whether any device manufacturer "needs" its own app ecosystem, or can succeed by leveraging the OS ecosystem. 

A somewhat related question is whether other participants in the mobile business "need" their own ecosystems to enhance their specific roles within the ecosystem. The value and feasibility of mobile service provider app stores provides an example. 

Samsung also is a case in point. Up to this point, Samsung has achieved significant success in the smart phone business by leveraging Android and the Android apps ecosystem. One might argue that nothing has changed, just because of the Apple patent infringement win. 

Google Play arguably provides equal benefit to every manufacturer of Android handsets. And, at least so far, it is hard to see that Google's ownership of Motorola has bestowed any particular advantage on Motorola, or any particular disadvantage to any Android licensee. 

Microsoft does face a problem, though, in building a critical mass of developers and apps for Windows Mobile. It's just a classic "chicken and egg" problem. Developers don't have lots of incentive to develop for an ecosystem with negligible numbers of users. Users don't have unusual incentives to buy a device using an OS that has significantly fewer apps available. 

That doesn't mean Microsoft can't get it done, but the end user device installed base will matter. 

 

Need More Spectrum?

Though it might seem unlikely, there is some debate about whether additional mobile spectrum really is needed. 

In some cases, the issue is "who has it" and who does not. But most in the business argue consistently that spectrum resources are inadequate for future needs. Others think the carriers just want more spectrum to avoid using other methods of handling capacity demands. 

Licensed spectrum normally is considered the basic raw material for creating a mobile business. But Wi-Fi offload shows there are other tools potentially useful for improving the performance of any network using any discrete amount of spectrum. 

Better antenna technologies, signal coding, network architectures or even mergers and acquisitions can alleviate apparent physical shortages, some would argue. 

But some would point out that 16 percent of the airwaves best suited for mobile broadband are available for that purpose.  

A significant majority – nearly 85 percent – of the crucial spectrum needed to support consumer demand is occupied primarily by government agencies and television broadcasters, Mobile Future says. 





How "Machine to Machine" and "Cloud Computing" Figure into Mobile Commerce

Machine to machine communications, sometimes referred to a new "Internet of things," is viewed as a major growth opportunity by most larger mobile service providers in developed markets, for obvious reasons. 

To create large networks of distributed, small sensors that often are mobile or untethered, and must operate at relatively low costs per unit, mobile networks are ideal. Much of the discussion about real-world applications now focuses on telemetry applications in the energy and transportation industries, for example. 

Separately, lots of companies and developers are working on mobile wallets, mobile payment systems and mobile commerce systems that aim to glean real-time intelligence about potential customers and shoppers, before, during and after a visit to a retail location.

Underneath it all, software and applications are designed to work with heavy reliance on external data center processing of data. So it already is possible to forecast that cloud computing, M2M networks, smart phones and 4G networks will be used together to create new mobile commerce opportunities and services. 

In retail environments, retailers are looking at mobile apps as ways to identify all shoppers, connect them with their shopping profiles, and either sell them something or at least gain enough data about them to help make a sale during the next visit, an article in the Harvard Business Review suggests. 

That typically involves ways to correlate past purchase data, current offers or loyalty systems with present location, for example.  But there might be new ways to combine mobile commerce systems with machine to machine networks, or make the mobile network itself use the phone as a sensor, to create more shopper intelligence. The issue, for some, will be privacy issues. 

When a family or group shops together, data theoretically can be gleaned from the person who checks out. Typically, nothing is learned about the others who do not actually check out, bur are exercising buying influence in the store.

Facial-recognition software might be used to identify groups' sizes and estimate members' ages, which could allow stores to provide the customers with targeted displays, without requiring any detailed personal knowledge. 

For example, a car dealership could put minivan ads on monitors as a family walks up to the showroom door.

In a more intrusive application, a RFID reader could, in principle,  wirelessly glean details from a credit card that never leaves a pocket or purse, as a person enters a store. 

Encouraging shoppers to use a shopping app while inside the store is one less objectionable way to correlate location inside the store with delivery of context-dependent coupons or suggested products. 

High-speed processing, typically using cloud-based mechanism, is a must, because customers don't linger long at any one physical spot when shopping. 

Tuesday, August 28, 2012

In U.K. Fixed Business, Data Revenues Will Not Replace Lost Voice Revenues

Smart Phones Will be a Majority of Devices Sold in 2013, Globally

Smart phones will account for the majority of global mobile phone shipments in 2013, for the first time, about two years earlier than previously predicted by IHS iSuppli. Among the reasons are a strong demand for lower-cost smart phones in developing regions.

Smart phone shipments in 2013 are forecast to account for 54 percent of the total mobile phones sold, up from 46 percent in 2012 and 35 percent in 2011, according to IHS iSuppli.

“Over the past 12 months, smart phones have fallen in price, and a wider variety of models have become available, spurring sales of both low-end smartphones in regions like Asia-Pacific, as well as mid-range to high-end phones in the United States and Europe,” according to IHS iSuppli.

By 2016, smart phones will represent 67.4 percent of the total mobile phone market.

Feature phones, which lack the sophisticated functionality of smartphones, in 2011 represented 46 percent of sales, but will drop to 41 percent in 2012.

By 2016, feature phones will have market share of 28 percent.

Entry-level and ultra-low-cost handsets will have14 percent share in 2012 and 4.2 percent share by 2016.

Samsung Resale Prices Drop, Apple Patent Win Seen as Cause

Significantly more customers of Samsung are putting their smart phones up for sale on Gazelle.com. Gazelle.com reports a 50 percent increase in placements of Samsung smart phones in the last week of August, which has led to a 10 percent drop in prices for those devices.

“Consumers seem to be jumping ship,” says Anthony Scarsella, chief gadget officer at Gazelle.com. “We expect this trend to continue, especially with this latest verdict.”

It is possible that Samsung users suspect the next generation of Samsung phones may be very different from those on the market today. That could be an issue since consumers get used to certain key features of their phones, and they might not be so sure that will be the case in the future. 

Indian Consumer Fixed Services Market To Reach Rs 240 Billion In 2012

The Indian consumer fixed services market is on pace to reach Rs 240 billion in 2012, a 2 percent increase from 2011 revenue of Rs 235 billion, according to Gartner. At an exchange rate of 44 rupees to one U.S. dollar, that implies about $5.5 billion in fixed network revenue. 

By way of comparison, 2012 mobile voice revenue should reach about $25 billion. 

Consumer fixed voice revenue is forecast to reach Rs 148 billion in 2012, a seven percent decline from 2011. From 2012 through 2016, voice revenue will further decline by 25 percent, Gartner says. 


“Voice traffic continues to shift to mobile,” said Neha Gupta, senior research analyst at Gartner. 

The Indian consumer fixed line services market will see growth from broadband and Internet access sectors, which will collectively grow to Rs. 92 billion in 2012. 

In 2012, household broadband penetration will cross six percent. 





Apple Genius Bar Seems to Pay Dividends

The conventional wisdom suggests that "good customer service" is a business asset. The conventional wisdom might be right, at least for Apple. 

Nearly 60 percent of Apple product owners said they are somewhat or much more likely to make another Apple purchase following their tech support experience, according to NPD Group. The positive tech service also helped change consumer perception of Apple, NPD says. 

Some 31 percent of survey respondents said they had a much more positive view of Apple after their service, NPD reports. 

That service left almost all of the 40 percent of Apple owners who took their Apple devices to the Genius Bar very happy. 

Nearly 90 percent of consumers who used Apple’s tech service said they were extremely or very satisfied.

Price help. Some 88 percent of Genius Bar consumers said their service was free. 

Coquitel Uses Mesh Wireless for Isolated Communities

Unlicensed spectrum and self-configuring “mesh” radios continue to be an attractive option for bringing voice and data communications to isolated communities.

Coquitel is about to provide such service to 10 Puerto Rico communities with a potential customer base of 150,000 people. Cooquitel was built with open source software and inexpensive hardware designed by Village Telco, a nonprofit organization in South Africa.

The mesh network will use unlicensed spectrum and is based on Village Telco’s “Mesh Potato," a weatherproof 802.11g wireless access and VoIP connection point designed for unstable electrical power conditions.The design principles are simple enough. The system is designed to support “pay as you go” affordable and simple to bill communications.

The idea is to make the process of setting up service as simple as creating a nw wordpress blog.

The costs are intended to allow a break even point in six months, and should be capable of being used by any business person, without special training.

In fact, it runs on about three watts, and can be powered by solar or battery power. Costing about $80 each,  the Mesh Potato  Mesh Potato is intended to be mounted outdoors, on a pole or the roof of a house. Users can connect to it with a standard ATA telephone connection or over Wi-Fi.

The unit also is designed to accept direct 240V current or any input between 10 volts and 40 volts DC, meaning the MeshPotato can be powered by a car battery.

The Mesh Potato uses an omnidirectional antenna with a maximum power of 20db (100mW), so it can operate within most countries’ wireless regulations and arguably works best in a local community with multiple user locations.

As always, backhaul is the key issue for the self-organizing network.

MasterCard, Everything Everywhere Announce NFC Mobile Payments Effort

MasterCard has signed an exclusive five-year deal to develop a mobile payments system for Everything Everywhere over the next half decade, using near field communications. 

After the initial payment capability, the plan is to then extend that platform into the usual mix of loyalty cards, money transfers and online payments using the smart phone as a point of sale device. 

Orange, one of EE's consumer brands, earlier had launched "Quick Tap," a mobile payments system that has had little success. 


One of the first products to launch through the partnership will be a co-branded pre-paid solution for mobile devices that allows customers to make payments using NFC at more than 100,000 retailer locations in the United Kingdom.

Strategically, the venture aims to enable consumers to have the same simple shopping experience whether they're paying in-store, online or using their mobile device. 

How Should We Regulate Declining Industries?

UBS researchers remind us of some salient facts about the U.S. fixed network voice business, namely that both the total number of lines in service, as well as profitability of voice services are dropping. 

Where at one point there were almost 100 million fixed network voice lines in service, there now are perhaps 50 million in service, about half of which are supplied by U.S. cable companies.

Mobile substitution accounts for much of the change. But the changes also should warn us about the growing risk of investing in the fixed network business. The issue is whether the evidence so far shows conclusively that investing in the fixed network at typical rates (14 percent to 19 percent of revenue) is sustainable and even rational in the long term if aggregate revenue does not grow. 

To be sure, up to this point telcos have added enough new revenue in the form of entertainment video and broadband access to basically offset voice losses. But telcos are reaching, if they have not already reached, saturation of the broadband access business. 

Telco share of video markets still is growing. But even there, there will be some upward limit on market share, and strategically, there is concern about the health of that business over the long term as well. 

It might have made sense to regulate telcos one way when the assumption was that they were spinning off large monopoly profits. That no longer is a reasonable assumption. 



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Mobile, Cable Markets Destined to be Concentrated

There's a good reason antitrust regulation exists in principle, though we might disagree about when and how to apply it. The reason is that a robustly competitive communications market will resolve itself into a stable pattern over time, with few leaders.

If you think about it even casually, there is a reason for that pattern. Over time, people gravitate to products and providers they prefer. That's why Apple consistently gets 60 percent to 70 percent of tablet sales. 

In the fixed network communications or video business, there are slightly different dynamics, since the market originally was a highly-regulated monopoly business, with one authorized provider. Only since 1985 has the U.S. market been "competitive" in a legal framework sense,  to growing degrees. 

That highly unequal outcomes have been seen would not be surprising to anybody who studies market structure. In a highly capital intensive and competitive market, few entities really can risk the amount of capital required to compete. In a roughly $1.8 trillion global telecom business, annual capital spending of about $345 billion is typical. 

The U.S. cable industry alone invests about $13 billion a year in a business generating about $98 billion annually, or about 13 percent percent of revenue. 

AT&T and Verizon in recent years have been plowing about 14 percent to 16 percent of revenues back into capital investment. 

The point is that "not so many" contestants can afford to spend that amount of money, every year, on capital investment. There are genuine economies of scale in the telecom and cable TV businesses and those advantages manifest themselves over time. 

So whether you look at the India mobile communications business or the U.S. cable TV business, there are a few firms leading each industry. At some important level, that will "always" raise antitrust issues. 

It has been clear for a couple of decades that no U.S. cable TV company would be allowed to gain more than 30 percent installed base of video customers. Thinking roughly along those lines seems also to have driven antitrust thinking about the proposed AT&T purchase of T-Mobile USA, as well. 

At some point, at least in the U.S. markets, the leaders in mobile, video or fixed network services will be forced to diversify into other lines of business simply because they have reached the limits of success in their original businesses. 







RankMSOBasicVideoSubscribers
1Comcast Corporation22,294,000
2DirecTV19,966,000
3Dish Network Corporation14,071,000
4Time Warner Cable, Inc.12,653,000
5Cox Communications, Inc.14,756,000
6Verizon Communications, Inc.4,353,000
7Charter Communications, Inc.4,341,000
8AT&T, Inc.3,991,000
9Cablevision Systems Corporation3,257,000
10Bright House Networks LLC12,079,000
11Suddenlink Communications11,250,000
12Mediacom Communications Corporation1,059,000
13CableOne, Inc.622,000
14WideOpenWest Networks, LLC1460,000
15RCN Corp.1333,000
16Knology Holdings256,000
17Atlantic Broadband Group, LLC254,000
18Armstrong Cable Services239,000
19Midcontinent Communications229,000
20Service Electric Cable TV Incorporated1217,000
21MetroCast Cablevision169,000
22Blue Ridge Communications1168,000
23WaveDivision Holdings, LLC1159,000
24General Communications142,000
25Buckeye CableSystem1133,000

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

Modern computing has some virtually-universal reference metrics. For Gemini 1.5 and other large language models, tokens are a basic measure...