A reader who is a happy Verizon’s FIOS customer left an interesting comment on one of the older posts. He said he loved the service, but decided to save some cash and wanted to switch back to the older technologies.

My problem is that Verizon monopolizes your house once FIOS is installed. By removing your copper wire you are now forced to stay with Verizon until other carriers have fiber optic capabilities. I did not find out about this until I wanted to switch back to DSL to save some money. They said “Nope, can’t”

4:34:02 AM    comment   

Earlier this summer, my Business 2.0 colleague, Paul Sloan had penned a wonderful story on what Apple might build next. He had speculated, with lots of reporting that video iPod with content from Disney could be on cards. Well, that has come true. In the story, he also hinted that Apple might build a WiFi-enabled iPod, that would allow consumers to buy music when connected to say Starbucks WiFi.

Recent trademark filings, as reported by AppleInsider show that the company might be headed in that direction. The filings are for something called Vingle, which is “Telecommunication services, namely, electronic transmission of streamed and downloadable audio and video files via computer and other communications networks.” Further the application describes Vingle as “an audio entertainment service that may be available in its retail stores.”

Other device hinted by this trademark application is some of a tablet device, that does more than just music. They do have patents filed on a device like this, and the trade mark is just an extension of those. They have been looking to hire a handwriting software engineer as well. An Apple version of Nokia 770 would make a lot of sense, especially now that the world has gone wifi!

4:33:39 AM    comment   

Even as excitement over Web 2.0 draws a new bunch of entrepreneurial prospectors, it's becoming clear that the Internet's Wild West days are ending. Governments are moving in, looking to exert more control over what has become a critical infrastructure for commerce and communication - and thus a central concern for bureaucrats. A consortium of U.S. states is making a new push to tax Internet sales. The European Commission, worried about ceding control over the continent's cultural heritage to U.S. search giants like Google and Yahoo, has announced plans to create its own massive digital library. The FCC is demanding that VoIP providers give the FBI and other law enforcement agencies a means to wiretap conversations running over their networks (eBay should have fun explaining that to Skype's European subscribers). Google is hiring Washington lobbyists to, as it nervously puts it, "defend the Internet as a free and open platform for information, communication, and innovation."

More broadly, the world's support for continued U.S. control over Internet rule-making appears to be falling apart. Authoritarian states like China, Saudi Arabia and Iran have always been uncomfortable with the Internet's openness, and they've grown more aggressive in demanding that states be given greater control over Internet governance. They are looking, in particular, to take over some of the power traditionally wielded by Icann, the California-based nonprofit organization operated under the auspices of the U.S. Department of Commerce, over the management of top-level domain names and other technical standards. Governments unfriendly toward the U.S. are also calling for changes in Internet governance, with Brazil even threatening that it will carve out its own regional Internet if the current system isn't changed.

Their cause received a major boost last month when the European Union came out in favor of greater international oversight over the Internet, calling for "the establishment of an arbitration and dispute resolution mechanism based on international law in case of disputes." The U.S. is steadfast in its opposition to the European proposal. A bipartisan group of congressmen, for instance, issued a letter arguing that "the Bush Administration, and specifically the Department of Commerce, should continue to maintain strong oversight so that Icann maintains its focus and meets it core technical mission." The IT industry, too, is defending the status quo. The issue should come to a head next month when the World Summit of the Information Society is held in Tunisia.

Whatever happens in Tunisia, governments' interest in controlling the Internet will only increase. Thanks to the Net, the world's computing and communications assets are becoming ever more portable; data storage and processing can increasingly be done anywhere, regardless of national boundaries. It's becoming possible, in other words, for essential components of a country's economic infrastructure to be operated on foreign shores, under the control of foreign governments. The implications of this fact, not just for commerce but for national security, are far-reaching - and governments have yet to grapple with them. But, inevitably, they'll be forced to grapple with them. Nations don't tend to like giving control over their economic destinies to other nations.

It would be nice to think that, when it comes to digital communications and commerce, countries will simply trust one another - nice, but not particularly realistic. The next Cold War will likely be fought on the Internet.

4:33:11 AM    comment   

I don’t want anyone to think I’m about to become a crypto-socialist, so a quick clarification of my previous post. The correlation between “network freedom” and the right to bear arms is only a partial one.

Taking up arms is something that can be done unilaterally. A network is by its definition a collective effort, even if an emergent rather than centrally co-ordinated one. So it cannot be purely a personal “freedom”.

The right to bear arms is equally re-stated as a right not to have your arms taken away from you. It doesn’t mean anyone has to provide you with a gun. Network access is a positive outcome of economic activity over which there are rivalrous claims to finite resources, like network engineers. But you don’t (yet) own the network, so there’s no corresponding right not to be deprived of the use of your possessions. Bearing arms is really a negative freedom (something bad that won’t be done to you), whereas Net access is a positive freedom. Freedom doesn’t do free lunches.

As I have said before, price discrimination in competitive markets is your friend. Filtering can be used for price discrimination. Filtering is a symptom of how well the system is performing. In a mature telecommunications sector, such as wireline, it is a symptom of ill-health. In a nascent one, such as cellular access in the developing world, being only able to access closed phone and SMS service is a vital part of the pricing regime that makes the network possible. The existence of network filtering is an output, not an input; a symptom, not a cause.

You do not automatically make your society freer and healthier by outlawing all network filtering. Indeed, you might achieve the exact opposite result.

Guns don’t come with enforceable end user license agreements that say “For shooting small furry animals only”. But we do distinguish between bunny-hunting guns and machine guns. We discriminate based on lethality. We don’t expect unlimited freedom to bear arms. A farmer wanting to blow some cute crop-nibblers to kingdom come is given carte blanche to blast away. Walk into a bank carring the same hardware, and expect trouble. We might likewise expect some boundaries to our communications freedom.

So I would caution people from taking the analogy too literally. The right to bear arms is also a means to an end — a populace willing and able to resist attempts to capture the machinery of state to perpetuate undemocratic activity. Unfettered and affordable network access is correspondingly essential to the operation of a free and dynamic post-industrial society.

So I’ll say it again, differently. Rules against network filtering are one way of dealing with significant market power in a vertically integrated part of the market where someone has significant market power in the access layer. It isn’t necessarily the best way of doing it, but it’s one way. In all other cases, it’s likely to be harmful. You should use the existence of such activities as a yardstick for the development and maturity of the industry. Expect new technologies and markets to be full of filtering, which slowly recedes over time as competition heats up. Meanwhile, municipal networks and other co-operative of user-owned connectivity systems should aim for more opennness that simple economics suggests, because the benefits are hidden in the political layer.

I alluded to the special privileges and protections that exist in telecom. I guess I ought to enumerate a few to back up such a claim in what is becoming sometimes a suicidally competitive environment.

The US is the easiest example of how barriers to entry are built via co-option of the regulatory infrastructure, but examples about all over. Tariff sheets and their attendant cost of lawyers to issue, public utility comissions stuffed with friendly faces, exclusionary numbering schemes, sweetheart deals on rights of way, spectrum auctions that have singularly failed to recover the maximum public benefit, suspicious tax rebates, opaque pricing schemes that fail to come under scrutiny, faux taxes; the list goes on and on. Mostly it’s just a matter of not having to comply with normal competition and cross-subsidy rules and establishing your own parallel (and captive) regulatory environment, plus special deals on costs on inputs and prices of outputs. Check out the usual places for more data.

UPDATE: Susan Crawford has some thoughts along similar lines, with the money quote being:

I'm trying to create a normative map that will help reveal the assumptions at the heart of the network providers' arguments. The key issue should be: is access to the internet a public goods problem, for which incentives are necessary to ensure buildout and maintenance? or -- Is access to the internet a monopoly problem, for which you have to find ways to ensure frictionless competition?

Right now, we can't tell what the right answer is.

My hunch is that we’ve not found ways for the invisible hand to operate that also allows collective action by users, groups of users, communities and regional government. It’s an “economics technology” problem, not a “technology technology” problem.

David Weinberger documents Tim Wu’s similar analysis of how the world is divinding into “openists” and “deregulationists”, where a confused cross-purposes of terminology, worldviews and methods collide.

4:31:24 AM    comment   

The TV network affiliates are scared to death (via PaidContent) about Apple's deal with ABC to make TV shows available on the Apple iPod at $1.99 a pop. They think it will erode viewership.

Personally, I can't think of anything more likely to increase my TV viewership. I haven't seen a regular network show in eons. (I have two little kids, I'm a sports nut, and if I have entertainment time left over, I'd rather fire up the XBox. Your mileage may vary.) Yet I'd think seriously about downloading some episodes of Lost onto my video iPod.

I want control over my media experience. I'll give my dollars and precious attention to the companies willing to give me that control. And I don't think I'm alone.

4:29:30 AM    comment   

Stumbled upon this study by Shosteck Group titled “The Indian Telecommunications Experience: Its Relevance for the World.” Although its nearly a year old, but is still relevant and gives a good summary of the Indian telecom market. You can get it for free by registering.

Chapter 1: An Overview
Chapter 2: Exploring the Global Potential of the Wireless Market
Chapter 3: Income and Subscriber Penetration
Chapter 4: India as a Case Study – The Impact of Deregulation
Chapter 5: The Prices of Infrastructure, Handsets, and Tariffs
Chapter 6: Marketing by the Operators
Chapter 7: Network Convergence

4:28:43 AM    comment   

A recent Pyramid Research survey of mobile phone users across the BRIC (Brazil, Russia, India and China) countries and the U.K. has ranked India as the top mobile game market.

Of the 355 respondents in India that identified themselves as mobile data users, 32 percent said that they play mobile games monthly, exceeding the UK mark of 15 percent.

Subscribers in India are far more enthusiastic about mobile gaming than subscribers surveyed elsewhere and once they have tried it, they tend to get hooked.

Almost a third of Indian mobile data users were restricted from mobile gaming by a lack of sophisticated handset availability.

4:27:48 AM    comment   

Tata Indicom has launched a new scheme, Non Stop Mobile, under which the validity of a pre-paid connection is extended for two years upon a single recharge, thus freeing mobile subscribers from monthly recharges. The service also offers free roaming in over 1500 locations in the country.

There is no monthly commitment to recharge. Above all, the recharge coupons are available from Rs.50 with 100 percent talk time.

Some noteworthy figures from the article.

At present Tata Indicom ‘True Paid’ launched in January this year has two million subscribers. However, they are targeting around 10 million subscriber base by March 2006…

As on September 30, the company’s subscriber base stood at 5.6 million spread across 1500 towns.

4:27:17 AM    comment   

Bharat Sanchar Nigam Ltd has decided to issue a single tender for installing additional 60 million GSM lines, subject to approval from the DoT. This will possibly be the largest-ever telecom expansion deal in the world, estimated to be worth over $5 billion. The PSU had earlier planned to issue two separate tenders, first for 40 million lines in October 2005, and the second one for an additional 20 million lines in mid-2007.

BSNL decided to go for a single tender because [base ']Äúvolumes will help it negotiate lowest possible equipment and installation prices[base ']Äù. Weren’t 40 million lines volume enough to lend negotiating power to BSNL?

4:26:00 AM    comment   

Bharat Sanchar Nigam Ltd has decided to issue a single tender for installing additional 60 million GSM lines, subject to approval from the DoT. This will possibly be the largest-ever telecom expansion deal in the world, estimated to be worth over $5 billion. The PSU had earlier planned to issue two separate tenders, first for 40 million lines in October 2005, and the second one for an additional 20 million lines in mid-2007.

BSNL decided to go for a single tender because [base ']Äúvolumes will help it negotiate lowest possible equipment and installation prices[base ']Äù. Weren’t 40 million lines volume enough to lend negotiating power to BSNL?

4:25:41 AM    comment   

The Financial Express has an interview with Allen Burnes, VP - High Growth Markets, Mobile Devices. Motorola Mobile Devices has established its High Growth Market (HGM) headquarters in Delhi with the senior management team relocating to India right now.

In fact, between 1991 and today, India has emerged as an R&D hub for Motorola. Several critical components of product/feature development are developed here and the country has the distinction of carrying out cutting edge R&D and engineering work for Motorola globally. Just this year, we announced the setting up of Motorola Labs in India and the expansion of the Global Software Group (GSG) from Bangalore to Hyderabad. There was also the launch of the new facilities for Motorola[base ']Äôs Core Networks Division (CND) and the Embedded Communications Computing (ECC) group.

Motorola started selling mobile phones in India in 1995 and was one of the first telecom companies to enter the country. But it failed to capitalise on its early mover advantage. Currently, Nokia leads the mobile handset market in India with a (GSM and CDMA combined) volume share of 67 per cent followed by Samsung and Sony Ericsson with 13 and 7 per cent marketshares respectively. Now, the $31 billion company is planning a come back with a mobile phone for the sub-Rs 2,000-segment to expand its customer base.

4:25:17 AM    comment   

With 65 million of largely urban subscribers in their fold, operators are speeding towards their target of 250 million. To achieve it, they have to look towards the rural market and next socio-economic bracket of users in urban / semi-urban India.

CIOL has a story on handset manufacturers increasing local / regional language support on mobiles.

According to Nokia India Pvt Ltd MD Sanjeev Sharma, [base ']ÄúAll entry and mid-range phones from Nokia support Hindi. Nokia 1600 and 1110 support five-language user interface (Hindi, Marathi, Gujarati, Tamil and Bengali), while Nokia 6030 supports nine-language user interface (Hindi, Marathi, Gujarati, Tamil, Bengali, Kannada, Malayalam, Telugu and Punjabi). With this, we cover about 80 percent of the Indian population.[base ']Äù

Samsung phones with local language support include Samsung D500, N700, SGH N380, SGH C210, SGH E730, SGH E 530 and SGH E 880.

Samsung D500, besides supporting messaging in Hindi, Marathi, Tamil, Bengali and Punjabi, also supports menu in Gujarati and Kannada.

The Samsung N700 supports five different regional languages and features a multi-language dictionary to support easy and intuitive SMS.

Sony Ericsson also provides Hindi SMS on its mobile phones.

Sony Ericsson India GM Sudhin Mathur said, [base ']ÄúWe were the first mobile company to provide predictive Hindi text on our mid to low-end phones.[base ']Äù

4:23:21 AM    comment   

A recent report by TRAI says that Indian telecom operators pay between 17% and 26% of their revenues as levies and taxes to the government, as against 5% paid by operators in Indian sub-continent countries and China.

The regulator made a case for imposing licence fees and spectrum charges only for the universal service obligation and to cover administrative costs.

Under the present regime, the government will collect Rs 17,850 crore in 2005-06 as levies from licence fees, spectrum fees, service tax and the universal service obligation. This is projected to increase to Rs 25,000 crore next year and Rs 30,856 crore during 2007-08.

It pointed out that under the 2001 regime, with a licence fee of 8-12% for mobile services, the government received Rs 657 crore in 2002-03. Under the present regime, with a licence fee of 6- 8% of the adjusted gross revenue, the growth in the sector has resulted in the government receiving Rs 1,666 crore in 2004-05. The government can hope to generate Rs 2,831 crore in 2005-06 from mobile operators as licence fee.

[base ']ÄúThere is no better example of growth in revenue from lower taxation,[base ']Äù the report added.

Despite the high levies, telecom tariffs in India are among the lowest in the world. For instance, a 60 second call costs 3 cents in India, compared with 4 cents in China, 11 cents in Brazil, 24 cents in Australia and 33 cents in Japan.

Related:
Telecom Tax Reforms
Telecom largest service tax contributor
All about telecom and tax

4:18:46 AM    comment