January 2010

New Broadband Stimulus Requirements Include Urban Cities

Urban cities will not be excluded from applying for broadband stimulus grants, as they were, for the most part, in the first round of funding.

New, separate notices of funds available (NOFA) have been released detailing eligibility requirements from the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS), the two federal agencies charged with disbursing $7.2 billion set aside in the American Recovery and Reinvestment Act for broadband projects. Unlike the first NOFA, the new NOFA from the NTIA doesn't require applicants to have neighborhoods that are "unserved" or "underserved" by broadband connectivity. During the first funding window, most urban cities couldn't claim to have areas with connectivity deficits like those stipulated in the NOFA, so they were shut out of competing. This frustrated local government officials who intended to apply for broadband stimulus money until the restriction was announced.

Ways That NTIA/RUS Are Failing Stimulus Applicants (updated)

[Commentary] Less than a fraction of the first round of the broadband stimulus funds have been awarded but now the second round is underway. But this creates a quandary: what are those that have applied for funds but not received notice either way as to the status of their applications supposed to do? Should they start reworking their applications, even though they don't know if they're going to win in this round or if their application never had a chance no matter how much tweaking?

1/26/2010

Daily says we need to be seriously considering requiring NTIA and RUS to release the scores they gave projects as well as any comments that were written during the review process.

See http://www.app-rising.com/2010/01/should_ntiarus_share_scores_an.html

US broadband's average speed: 3.9Mbps

[Commentary] The latest State of the Internet report from Akamai shows the US trailing in a number of metrics, including average connection speeds and broadband penetration.

For the third quarter of 2009, the average connection speed for the country was 3.9Mbps, placing the US in 18th place globally. Unsurprisingly, South Korea topped the list with an average of 14.6Mbps, almost twice the average of second-place Japan with 7.9Mbps. Recent studies show that US customers also pay a lot more for what they get. For our average of 3.9Mbps, we pay about $40 per month. In France, by comparison, many users have access to a $45 monthly plan that includes 20-30Mbps connections, VoIP service, and HDTV with a DVR included. Such plans in the US regularly exceed $100, and speeds rarely reach those levels.

The Akamai study underscores the need for the National Broadband Plan to encourage expansion of high-speed networking infrastructure as well as drive the necessary competition to make broadband connections more affordable.

Who Pays the Price for Network Neutrality?

[Commentary] Once upon a time, grassroots advocacy belonged to the "little guy," the underrepresented and oppressed; people with limited financial means but with stores of human capital whose ideology inspired entire nations and whose persistence could move mountains. Dr. Martin Luther King Jr., Mahatma Gandhi, Cesar Chavez - these were the revolutionaries of old, people who ascended greatness in the throes of establishing new order for the good of the regular people and the unserved.

It is clear to me that the digital world needs new voices to champion the needs of the digitally disconnected. When I read the blogs and filings of groups like Free Press and Public Knowledge, I wonder who they really represent. Don't get me wrong; I believe their advocacy is sincere, and I too support the open Internet as it exists today. I just can't tell who they are advocating for and who they really care about. And frankly, I'm not sure that they know either. I'll tell you upfront who I care about. I care about the poor, underserved minorities and the digitally disconnected. And I think it is high time for some truth telling.

To find the truth you need to follow the money. The current net neutrality battle that has ensued in Washington, DC has very little to do with the interests of the poor and unserved consumers. It has even less to do with small content providers and new digital entrepreneurs. It is about the competing corporate business interests of the giants - Internet service providers versus the big corporate application and content creators.

Network Neutrality Comments: Verizon Says Network Neutrality Rules Unnecessary, Unconstitutional

Verizon Communications's network neutrality filling is unique in that the telecom giant is one of the only companies which provides broadband service via high-speed fiber optic cables and copper digital subscriber lines, plus wireless broadband via third-generation and fourth-generation wireless services.

The company's opposition to net neutrality is based on, it says, the lack of evidence that users' Internet rights have been violated. Additionally, the companies said that enforcement of such principles will have negative economic consequences. Internet services are still in their early stages, the company said, and heavy-handed intervention would prevent future innovation. Additional, the current level of competition among the various providers will prevent any violation of rights. As regards wireless services, Verizon said that the Federal Communications Commission has no basis for attempting to enforce such rules because of the lack of problems in the past with network discrimination. Network management regulations would be particularly harmful for wireless providers, as they must manage scarce spectrum with the needs of customers.

Instead of imposing a blanket set of rules, Verizon said that regulations should only be adopted when harmful practices are undertaken and the regulation should occur on a case by case basis. The creation of rules they believe will limit future innovation and impose a high level of costs on providers.

Amazon to FCC: Prioritizing Internet traffic is OK

Amazon wants the Federal Communications Commission to let Internet service providers speed up some traffic to consumers as long as other content is not harmed in the process.

In its filing with the FCC in the network neutrality proceeding, Amazon asked that broadband services providers be allowed to favor some content if doing so does not hurt other content or services. Amazon is one of the only "edge" providers to support traffic prioritization.

Paul Misener, Amazon's Vice President of Global Public Policy, said the Internet has long been interconnected with services, content and devices on "the edge" of a broadband network that enhance some Internet content over other content. That's OK, he said, because the performance of that other content is not "disfavored..." "Content may be favored, so long as doing so causes no harm--e.g., delays in transmission or other reductions in quality--to other content." But if a particular user chooses to have some content favored to them, Internet service providers have to ensure content to or from other users is not negatively affected.

Apple responsible for 99.4% of mobile app sales in 2009

The latest report from market research firm Gartner suggests that mobile apps are big business, and that business should only grow in the next few years.

According to Gartner's numbers and those reported by Apple, Apple completely owns this market, likely grabbing almost every one of the 4.2 billion dollars spent on mobile apps in 2009. Based on Gartner's estimates and ars technica analysis, Apple could hold on to at least two-thirds of the market if current sales trends hold for 2010. Gartner's predictions for 2010 are 4.5 billion apps sold, for a total of $6.8 billion in revenue. If Apple can merely maintain its current rate of about a quarter billion app sales per month, and revenue share tracks with market share, it stands to be responsible for 3 billion apps sales—67 percent—good for about $4.5 billion in revenue. Apple's cut would be $1.35 billion, with developers taking the remainder. However, as Apple gains more users from sales of new iPhone models and possibly from an expected tablet, Apple could get an even larger share of the mobile app market.

Predictions for 2013, just a few years away, are even bigger—21.6 billion apps sold for a total of $29.5 billion revenue. The firm predicts that by then, 25 percent of the revenue generated by mobile apps will be from free versions supported with advertising. "Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded," Baghdassarian said. That makes Apple's acquisition of a mobile advertising firm seem like an even smarter move, just for the extra revenue alone.

Skype Steals Even More Minutes From Phone Companies

[Commentary] When a crappy economy meets VoIP, cheaper IP telecommunications win, according to research from TeleGeography showing that Skype is taking market share from the international calling market.

TeleGeography found that the projected growth of international telephone traffic was almost halved in 2009 — to a mere 8 percent — while Skype's growth accelerated by 51 percent. TeleGeography also notes that over the past 25 years, international call volume from telephones has grown at a compounded annual rate of 15 percent. In the past two years, however, international telephone traffic growth has slowed to only 8 percent on an annual basis, growing to an estimated 406 billion minutes in 2009 from 376 billion minutes in 2008.

Skype is the largest long distance phone company in the world. And as VoIP grows both on the computer and on mobile devices, thanks to an ever-increasing number of VoIP apps for mobile phones, international carriers are going to find yet another source of profits eroded.

Stations Seen Winning With Localism

BIA/Kelsey released its top five trends and industry developments to watch in 2010 in interactive local media, mobile local media, broadcast, global Yellow Pages and vertical directories and classifieds.

Broadcasters win with localism — Local broadcasters have three incredibly valuable assets: local brands, local content and local sales forces; creative broadcasters will bring these assets together in compelling business models.
The return of a competitive search market — The next two years will fundamentally alter the local media market landscape, based on the thesis that the economic implosion over the past year and a half will irrevocably change advertiser behavior.
Location, location, location — The mix of technology, usage and advertiser trends will further define the pace and change of mobile media and affirm the core role mobile will play in the $140 billion local media industry. Location and geo-targeted advertising will represent a long-elusive revenue stream for Twitter and for third parties that mash up Twitter streams and location data. Also expect Facebook to integrate automatic location detection into the status updates that have become central to its user experience.
Mobile monetization takes hold — Look for publishers to begin testing discrete monetization paths -- from discrete landing pages to pay per call -- for their mobile search products.
Newfangled ad networks begin to monetize hyperlocal — Vertical ad networks hold a great deal of promise.

2010 seen good for TV, bad for e-readers

The television will dominate home entertainment for another year in 2010, showing more staying power than newspapers and even their digital reincarnation the e-reader which could both struggle, a new report predicts.

According to the Deloitte 2010 TMT Predictions, the TV and its fixed schedule will remain a central part of the entertainment experience despite the growing demand from viewers who want to watch individual programs when they want them. The forecast goes against many expectations as analysts have long expected the habit of downloading content from the Internet onto a computer -- when and where the viewer wants it -- to slowly spread to the way viewers also watch TV. Moves in Britain to make TV catch-up and movie services available on the television and not just through a computer has proved hugely popular and the trend had been expected to accelerate. But Deloitte said the traditional linear system of delivering television and radio was still easier and sufficient for the majority of consumers.

Benton

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