February 2012

4G phones mean more customer service calls, says JD Power

Owners of 4G wireless devices are more likely to call customer service for help, according to a JD Power report.

It’s not clear whether these 4G problems are a long-term phenomena or growing pains. In any case, JD Power found that 60 percent of 4G subscribers called their wireless provider in the last six months. Customers with 3G phones called their carrier 47 percent of the time. Feature phone owners only called for support 35 percent of the time. The big problems: 4G devices see more network problems and customers don’t understand that service coverage is limited. Given Verizon’s lead in 4G most of those calls were aimed at the carrier. Nevertheless, Verizon Wireless had to top overall customer service score, according to JD Power.

What a Facebook IPO means for Silicon Valley

Get ready for a blockbuster — and almost nuts — technology 2012. Why? Because Facebook is doing the mother of all initial public offerings. And much like Netscape and Google before it, the $5 billion offering is being viewed as the much-awaited catalyst for the technology industry and is expected to set off a flurry of activity.

I have been here long enough to cover the IPOs of both Netscape and Google, and on both occasions, the tailgate effect was enough to pull even the clunkers (read: marginal startups) to the proverbial finish line. We are already seeing four recently public companies — Pandora, LinkedIn, Zynga and Groupon — ramping up their efforts to buy little startups. Google is competing for talent and so are other Internet giants. And now Facebook!

What Is Facebook's Business?

Facebook makes money by placing ads next to your status updates and photos. How hard could their business be?

As its S-1 filing reflects, that answer is more challenging than you think. Facebook is going to have to balance a number of competing interests. It's going to have to figure out how to get people to share more of their lives on the social network, while figuring out how to display only the most interesting stuff to each individual person, and simultaneously developing ever more innovative ad products that Facebookers deem useful and relevant rather than intrusive. It's not a simple proposition. Which is partly why, as the S-1 reports, that the company has tacked up signs on the walls of its new Menlo Park campus that say "this journey is 1% finished."

3 Things That Will Change After Facebook's IPO, And 2 Things That Won't

Once Facebook goes public, the party's over, right? Less innovation and more kowtowing to Wall Street, no? Maybe. Then again, maybe not.

Three things that will change:

More (Innovative) Ads: Are you a marketer who wants more access to Facebook’s 800 million users? Start thinking about information about your product that could be something a user would want to share.
Shopping Spree!: Think you’re a potential Facebook acquisition target? Start polishing your pitch.
More Lobbying: Are you an old Washington hand looking for a new and exciting career? Start friending Facebook’s DC team.

Two things that wouldn’t change:

The Relentless Pace of Innovation: Hoping that going public means Facebook will stop messing with your Wall? Fuhgeddaboudit.
Zuckerberg The Product Guy/Sandberg The Suit: If you’re a New Yorker hoping to catch sight of Zuckerberg spending more time wining and dining Wall Street types, better bone up on what Sandberg looks like instead.

Super Bowl Ad Rates Can Double Within Ten Years

The high price of Super Bowl advertising is not a new story: the cost of buying a 30-second ad first broke $1 million in 1995. The price has since grown quickly, and it shows no signs of slowing.

Last year, News Corporation’s Fox charged an average $3 million for a spot in the showdown between the Green Bay Packers and Pittsburgh Steelers. This year’s price of $3.5 million is a 17% increase and is double the rate charged for a 30-second spot 14 years ago. In the last 14 years, the price of a Super Bowl ad has increased by an average 5.7% annually. At that rate, it would take another 13 years for the price to double to $7 million. But Super Bowl ad costs can easily hit the $7 million mark within the next decade thanks to two key factors: the networks’ pricing power and a new set of rights agreements that will force networks to widen their revenue streams in the coming years.

Comcast CEO looking to expand global reach

After four decades of snapping up U.S. cable companies, then acquiring the news-and-entertainment giant NBC Universal Inc. in 2011, Comcast is ready to take on the planet.

"The new technologies make it a flat world," said Comcast CEO Brian Roberts, referring to the best-selling book The World is Flat: A Brief History of the Twenty-First Century by Thomas Friedman. "If you have the content and you have the technology and you have the scale . . . and you have the brands and the credibility, there are tremendous opportunities." The world, in Roberts' view, is getting smaller, and international sales could be one of Comcast's fastest-growing segments over the next five to 10 years. It won't come in the traditional Comcast way, through the acquisition of hard-line cable-TV systems. More likely, it will happen through a reenergized NBCUniversal.

Six interesting technology law issues raised in the Facebook IPO

The securities laws require that companies going public identify risk factors that could adversely affect the company’s stock. Facebook’s S-1 filing identified almost 40 such factors. A number of these risks are examples of technology law issues that almost any internet company would face, particularly companies whose product is the users: 1) Advertising regulation, 2) Data security, 3) Changing laws in user privacy, rights of publicity, data protection, intellectual property, electronic contracts, competition, protection of minors, consumer protection, taxation, and online payment services. 4) Intellectual property protection, 5) Patent troll lawsuits, and 6) Tort liability for user-generated content.

FCC Inquires and Complaints Rise More than 10% in 3Q

The number of telecom-related consumer inquiries and informal complaints received by the Consumer & Governmental Affairs Bureau (CGB) increased by more than 10% between the second and third quarter of 2011, rising from 13,023 to 14,419, the FCC reported Jan. 31. Complaints related to bundled and VoIP Services totaled 1,661, the first time the FCC reported this data separately. Cable & Satellite Services complaints increased by more than 19%, from 1,389 to 1,663. The number of Radio and Television Broadcasting complaints decreased more than 3% from 2,164 to 2,083. Wireless Telecommunications complaints increased by more than 12%, from 26,149 to 29,390, with complaints regarding Call or Message to Wireless Devices making up the majority. Wireline Telecommunications complaints increased by nearly 9%, from 29,378 to 32,050. Unsolicited Faxes were one of the top complaints.

Spectrum Auctions and Lessons Learned

Former Federal Communications Commission Chairman Reed Hundt concedes FCC mistakes in the spectrum auction that involved NextWave, yet he is still pushing for FCC discretion in future spectrum auctions.

As Reed admits, Congress gave the FCC discretion in the PCS C Block auction, and it used that discretion in a way that resulted in an auction that was a disaster for the industry and for the Treasury. And the flaw, in our view, was not simply a function of installment payments. It was the decision to have a closed versus an open auction. Our point is that an auction should be open to all competitors, not just to those handpicked by the FCC. Reed was a good and diligent chairman, and it’s characteristic of him that he’d acknowledge a mistake. But Congress has every right to learn from those mistakes, and to insist the FCC not repeat them. That’s what the House spectrum bill does. The FCC should get behind it and put the interests of the country first so that we can quickly move forward to address the looming spectrum crisis that we all agree is the biggest threat to innovation, job creation and growth for the wireless industry.

The trials of Uber

You need a ride. Instead of lingering at the intersection flailing your hand in the air, you fish out your smartphone. A few taps later, Uber's slick, futuristic logo appears, a seriffed "U" hovering over a stark black background. Signing up takes a few seconds. Once you provide basic contact and credit card information, a Google map pops up displaying your nearby surroundings. You select a spot on the screen to set a rendezvous and watch as a car-shaped icon inches toward it. When a black sedan pulls up a few minutes later, the driver welcomes you by name and offers free snacks and bottled water. At your destination, the fare is automatically charged to your card. No fumbling with wadded cash. No flimsy receipts to stash. You simply hop out and go.

In eight major cities, including New York, Paris, and Washington D.C., three-year-old startup Uber is trying to remake the cab experience. Drivers aren't employed by Uber, but get a cut of each fare instead. The arrangement can be lucrative, bringing in upwards of $500 a day, a sum some cab drivers only make after a week's work. Rates take into account the typical factors of time and distance but -- through an Uber-developed algorithm -- also factor in demand. Uber's servers crunch information about a where riders are requesting cars, where they're likely to want to go, even traffic-distorting big events nearby. When a Giants in San Francisco game lets out, several Uber cars are likely close-by. The man behind Uber is Travis Kalanick.

Benton

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