September 2009

Smartphones set to become mainstream

Smartphones have until now been positioned as a premium product within the handset market. And such has been the demand for BlackBerrys and iPhones that, even in the global economic downturn, smartphone sales remained one of the few bright spots within the handset market. But over the next few months an array of new models from a variety of phonemakers, including some new entrants, is due to hit the market. The new entrants aim to bridge the pricing gap between smartphones and standard feature phones and bring the more powerful product to the mass market. According to Anshul Gupta, principal research analyst at Gartner, overall handset sales are expected to shrink by 4 per cent this year compared to last year, while smartphone sales are forecast to grow by more than 20 per cent. Analysts say the expansion of the smartphone market will turn a fast-growing but relatively small sector into a more significant contributor to global handset sales volumes. Meanwhile, existing smartphone makers have been able to lower their cost of production since Apple's initial iPhone thanks to smaller and more sophisticated chips.

Foreign Airlines Ahead of US on Cellphone Use

Cellphone use on airplanes, it would seem, is on extended hold in the United States. The national union representing flight attendants wants Congress to ban in-flight phone calls, and survey after survey of airline passengers shows strong opposition to allowing cellphones on planes. So while domestic airlines rush to wire their cabins to provide in-flight Wi-Fi connectivity, there is no indication whether, or when, passengers in the United States might be able to make a cellphone call at 37,000 feet. In much of the rest of the world, meanwhile, passengers on various foreign airlines are already routinely using cellphones and other personal wireless devices to make and receive calls in flight. Industry officials say cellphones can be used on more than 15,000 flights a month.

Senators Plan Bill To Advance Net Neutrality

Apparently Sens Byron Dorgan (D-ND) and Olympia Snowe (R-Maine) are considering legislation aimed at helping advance the adoption of new rules on Network Neutrality. Such a bill could be a timetable or deadline for the Federal Communications Commission to finish its rule-making process. The Senators have been a vocal proponents of such rules.

Response to AT&T's letter to FCC on Google Voice

AT&T filed a letter with the Federal Communications Commission, alleging that Google Voice is preventing its users from making outbound calls to certain phone numbers with inflated access charges, and asking the FCC to intervene. Google agrees with AT&T that the current carrier compensation system is badly flawed, and that the single best answer is for the FCC to take the necessary steps to fix it. Google Voice's goal is to provide consumers with free or low-cost access to as many advanced communications features as possible.

In order to do this, Google Voice does restrict certain outbound calls from our Web platform to these high-priced destinations. But despite AT&T's efforts to blur the distinctions between Google Voice and traditional phone service, there are many significant differences:

1) Unlike traditional carriers, Google Voice is a free, Web-based software application, and so not subject to common carrier laws.

2) Google Voice is not intended to be a replacement for traditional phone service -- in fact, you need an existing land or wireless line in order to use it. Importantly, users are still able to make outbound calls on any other phone device.

3) Google Voice is currently invitation-only, serving a limited number of users.

AT&T is trying to make this about Google's support for an open Internet, but the comparison just doesn't fly. The FCC's open Internet principles apply only to the behavior of broadband carriers -- not the creators of Web-based software applications. Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.

Why AT&T is full of it and why Google Voice is good for the consumer

[Commentary] Here's a question -- When did AT&T become the darling consumer friendly telephone company that cares about your privacy and delivered superior and innovative services? Answer: Only in your dreams, you lowly consumer. First of all, the Internet's infrastructure IS different from the telephone infrastructure. Just look at the billing --- AT&T (and all other phone companies) charges consumers by the minute or per message. Can you imagine getting charged by the email message, IM message or per YouTube video stream? AT&T would love to do that. Second, Google Voice is a software application that rides on infrastructure built by other companies. It runs on the Internet protocol. It is NOT a common carrier service. But I can't blame AT&T for arguing this point as they never really understood the difference between an application on the Internet and the public switched telephone network (PSTN). Third, it's a FREE service and consumers that have it love it. It is not intended to be a replacement for traditional telephone service. If you do not have a phone land line or mobile line from AT&T or any other carrier Google Voice does not work. If anything, Google Voice drives more telephone traffic for AT&T. If they want to be competitive, AT&T should build a similar service on PSTN and offer it as a free service but that would just be too consumer friendly. Instead of snarky, whiny complaints, AT&T's statement should have been, "We have been outsmarted and out-innovated again so we would like the consumer to pay for our ineptitude in technology planning and foresight. We want the government to save us again, please."

Genachowski on Why We Need Network Neutrality

A Q&A with Federal Communications Commission Chairman Julius Genachowski on Network Neutrality. On why we need net neutrality rules he says, "[W]e have seen some troubling behavior in the marketplace already, and there are a number of factors about the current marketplace that pose questions about future innovation and economic growth. Moreover, business models may develop, or technology may be deployed in the network, that frustrates users and dramatically departs from the Internet's open-architecture roots. Unscrambling the eggs later will be very difficult, if not impossible, if action is not taken to affirmatively choose to safeguard this critical platform for innovation and opportunity."

Net Neutrality: Trickier Than You Think

[Commentary] As is so often the case in telecom policy debates, the combination of genuine technical complexity and massive lobbying efforts by some of the most skilled and well-financed lobbyists in the world sometimes make it hard to discern the real issues at play. It won't be easy for anyone who isn't paid to do so to stay on top of the Network Neutrality debate; there is so much at stake for the big corporate interests that their shouting back and forth is likely to drown out reasoned discussion more often than not. But Weber hopes that small Internet content companies can find a way to take part in the process. In the grand scheme of things, after all, it's nothing less than a life-or-death issue. (Jonathan Weber is the founder, publisher, and CEO of New West, a media company covering life and business in the Rocky Mountain West.)

Whose Internet is it, anyway?

A Q&A with David Clark, a researcher in the Massachusetts Institute of Technology Computer Science and Artificial Intelligence Laboratory who for most of the 1980s was the Internet's chief architect. Clark has been following the Network Neutrality debate for decades.

Designed for Change: End-to-End Arguments, Internet Innovation, and the Net Neutrality Debate

Many advocates of strict Network Neutrality regulation argue that the Internet has always been a "dumb pipe" and that Congress should require that it remains so. A new report by ITIF Research Fellow Richard Bennett reviews the historical development of the Internet architecture and finds that contrary to such claims, an extraordinarily high degree of intelligence is embedded in the network core. Indeed, the fact that the Internet was originally built to serve the needs of the network research community but has grown into a global platform of commerce and communications was only made possible by continuous and innovative Internet engineering. Bennett traces the development of the Internet architecture from the CYCLADES network in France to the present, highlighting developments that have implications for Internet policy. This review will help both engineers and policy makers separate the essentials from the incidentals, identify challenges to continued evolution, and develop appropriate policy frameworks.

Will FCC pry iPhone loose from AT&T?

[Commentary] If you're wondering whether Federal Communications Commission Chairman Julius Genachowski finally will pry the iPhone from AT&T's cold dead hands and release it into the wild, you're not alone. "Would the proposed net neutrality rules result in a default ban of exclusivity deals?" asks Ryan Radia, information policy analyst with the Competitive Enterprise Institute (CEI), a free enterprise and limited government organization based in Washington (DC). "That would not be the case, based on my understanding of the proposed rules." Andrew Jay Schwartzman, president of Media Access Project, a public interest law group in Washington, was quoted this week in a Bloomberg News report as saying, "The iPhone can't be exclusive under a true net neutrality regime." But CEI's Radia says exclusivity may still be possible, provided the agreement doesn't carry provisions that would conflict with whatever the final network neutrality rules might be. "[Deals may be legal] so long as the deals do not prevent a consumer from accessing the content of their choice," he says. But, if Apple and AT&T allowed access to only a subset of applications or services, such a practice would likely be illegal.

Benton

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