July 2009

Two studies point to explosive mobile broadband growth

Informa Telecoms & Media's newest World Cellular Data Metrics report indicates mobile broadband subscribers worldwide almost reached a quarter of a billion at the end of March with more than 225 million subscribers. The figure represented 93 percent year-on-year growth. Smartphones are contributing to a surge in mobile data traffic, Informa said. The spread of the iPhone continues to boost data usage for those operators that distribute the model with O2 reporting that 40 percent of its data traffic in the U.K. comes from the smartphone market. Meanwhile, Allot Communications released this week what is called its inaugural Global Mobile Broadband Traffic Report (GMBT), which indicates that worldwide mobile data bandwidth usage has increased by about 30 percent during the second quarter of 2009. Again, Asia leads the growth with 36 percent, while Europe posted 28 percent growth and the Americas recorded 25 percent.

Sandvine Upgrades Bandwidth-Management Platform

Sandvine has enhanced its Fairshare system -- used by Comcast and other providers to manage congestion on broadband networks -- to blend the ability to control bandwidth consumption based on both user activity and application types. The Fairshare Traffic Management 2.0 platform, which became generally available in June, is able to manage network access using both application and subscriber-usage data.

FCC Releases Local Telephone Competition Data

The Federal Communications Commission released new data on local telephone service competition in the United States. Twice a year, all incumbent local exchange carriers (incumbent LECs) and competitive local exchange carriers (CLECs) are required to report basic information about their local telephone service, and all facilities-based mobile telephony providers are required to provide information about their subscribers, pursuant to the FCC's local telephone competition and broadband data gathering program (FCC Form 477). 1) End-user customers obtained local telephone service by utilizing approximately 124.6 million incumbent LEC switched access lines, 30.0 million CLEC switched access lines, and 255.3 million mobile telephony service subscriptions at the end of June 2008. 2) Mobile telephony service providers reported 255.3 million subscribers at the end of June 2008, which is 17.0 million, or 7%, more than a year earlier. 3) There was at least one CLEC serving customers in 82% of the nation's Zip Codes at the end of June 2008.

AT&T beats forecast on strong iPhone

AT&T Inc. Thursday posted a smaller-than-expected drop in quarterly profit as strong sales of Apple Inc's iPhone helped boost wireless subscriber growth. The news sent AT&T shares up 2.5% in premarket trading, even as some analysts worried that the company's dependence on the iPhone for much of its growth raised concerns about what would happen if it lost its exclusive rights to sell the phone in the US. AT&T added 1.4 million net subscribers in the second quarter including 1.2 million retail monthly bill-paying customers.

AT&T chief: iPhone won't be exclusive forever

It's not realistic to believe AT&T will have an exclusive on the iPhone forever, CEO Randall Stephenson said Thursday. "There will be a day when you are not exclusive with the iPhone," Stephenson said, speaking at Fortune's Brainstorm: Tech conference here. However, he declined to get into details on the company's negotiations with Apple. The issue of whether--and more likely when--AT&T loses the exclusive on the iPhone has become a major issue for the company and its investors.

Poor in Colorado may get free cell phones

Thousands of low-income Coloradans reliant on public assistance could get a free cellphone under a plan before the state Public Utilities Commission. If approved, the plan by TracFone Wireless in Miami would make Colorado the 17th state it has settled into with free cell service for the indigent, a form of wireless welfare that proponents say taps into one of the last untapped markets for the telecom technology. The program is a twist on Lifeline, a long-standing federal subsidy that provides low-income families with a break on their land-line telephone bill in order to ensure emergency 911 service. In Colorado, it's called LITAP — the Low Income Telephone Assistance Program — and is available to anyone receiving aid from any of six welfare funds: Colorado Works Assistance (TANF), Supplemental Security Income, LEAP, Aid to Needy Disabled, the Old Age Pension Fund and Aid to the Blind. Statewide, about 65 percent of those eligible participated in Lifeline last year. The money — more than $800 million in subsidies were paid last year for low-income phone service across the country — comes from the Universal Service Fund, a tax on all telephone lines. Of that amount, Coloradans received nearly $3.2 million in low-income subsidies. TracFone's subsidized program, called Safelink Wireless, gives users at least 68 minutes of free cell service each month — in Colorado, it would be 83 minutes — and unlimited access to 911 service even if the minutes are used up.

Hollywood dealmaking risks antitrust scrutiny

As media giants band together to reinvent themselves in the digital age, potentially sharing everything from online video sites to DVD distribution, they have to be careful not to raise antitrust hackles. Hollywood has long butted heads with competition regulators, dating all the way back to the 1940s when the U.S. Supreme Court ruled studios had too much control over the distribution of their own content and forced them to sell movie theaters. Dealmaking is expected to heat up in the entertainment industry as studios experiment with various ventures and partnerships to tackle tumbling DVD and advertising sales. Some media watchers believe recent collaborations to bring TV programing to the Web -- such as Hulu.com and "TV Everywhere" -- have the potential to raise regulatory eyebrows, resurrecting the issue of "vertical integration."

Disney CEO bullish on direct Web marketing to consumers

Walt Disney Co chief Robert Iger said on Wednesday advertising will rapidly grow more sophisticated as media firms begin tracking consumer preferences and selling the data on to advertisers. But Iger warned that privacy concerns may come to the fore with the growing ability of Web ads to monitor individual preferences and target surfers with custom ads. Iger has warned that fundamental changes now underway in the broadcast and cable industries may permanently cut TV advertising sales and prices, leaving traditional media companies looking for ways to make up that revenue when the economy recovers. The executive told the Fortune Brainstorm Tech conference that media companies can pump up online sales volumes by either selling consumer information or by marketing directly to consumers based on individual tastes.

Radio Royalty Fight Moves To Senate

The battle over legislation that would end a longstanding royalty exemption afforded to AM and FM radio will move to the Senate early next month with an August 4 hearing in the Judiciary Committee. Senate Judiciary Chairman Patrick Leahy and House Judiciary Chairman John Conyers introduced the legislation, which would bring traditional broadcasters in line with Internet, cable and satellite platforms that pay performers for their works. The Recording Industry Association of America, SoundExchange and the American Federation of Musicians are carrying the torch for that effort while the National Association of Broadcasters has fought hard against the measures.

House Panel Revisits File-Sharing Security

The House Oversight and Government Reform Committee will wade back into the debate over inadvertent file-sharing over peer-to-peer networks next Wednesday. The panel has scheduled a hearing that will focus on how popular platform LimeWire and other services could endanger citizens and jeopardize national security. Lime Group Chairman Mark Gorton, Tiversa CEO Robert Boback and Progress and Freedom Foundation Senior Fellow Thomas Sydnor are scheduled to testify. The committee held similar hearings in July 2007 and four years earlier. After the 2003 hearing, the P2P industry adopted a voluntary code of conduct to prevent inadvertent disclosures of sensitive information.