August 2011

Amazon moved aggressively to fulfill its new ambition to publish books as well as sell them, announcing that it had signed Timothy Ferriss, the wildly popular self-help guru for young men. Amazon has been publishing books for several years, but its efforts went up several notches in visibility when it brought in the longtime New York editor and agent Laurence Kirshbaum three months ago as head of Amazon Publishing. Traditional publishers are downright nervous about the intentions of Amazon, with its deep pockets and a unparalleled distribution system into tens of millions of living rooms and onto electronic devices. Some independent bookstores have already said they do not intend to carry any books from the retailer, not wanting to give a dollar to a company they feel is putting them out of business.

AT&T ’s pursuit of U.S. government approval for its $39 billion planned purchase of T- Mobile USA may spur more regulation for the entire telecommunications industry.

If the Federal Communications Commission and the Justice Department sign off on the transaction, they may require AT&T and Verizon Wireless to keep prices from rising, said Carl Howe, an analyst at Yankee Group. Regulators also might create a new mobile service provider by combining smaller competitors or requiring the combined AT&T- T-Mobile to sell part of its customer base to a mobile virtual network operator such as TracFone Wireless or Tru, according to a Yankee Group report. “Once you have a monopoly, you have pricing power, you need rules,” Howe, the report’s co-author, said. Without more regulation, “your choice is lawlessness.” The deal would leave 17 of the top 27 wireless markets in the U.S. “highly concentrated,” according to the Yankee Group report, co-authored by Gigi Wang. Sprint Nextel Corp. would be a weakened third-place player that would be bought by Verizon, “creating a national duopoly,” the report said.

The FCC will need to cap what a combined AT&T-T-Mobile and Verizon could charge rivals’ customers for access to their networks for data transmission, Howe said. The FCC requires providers of data-roaming services to offer access to other providers “on commercially reasonable terms and conditions” under an order that went into effect in June. “Just because there’s an order doesn't mean the regional carriers feel the prices are accessible or that the FCC is enforcing it,” Howe said.

Rep. John Dingell (D-MI) took the Federal Communications Commission to task for what he sees as a failure to fully answer his questions about spectrum policy. In a letter to FCC Chairman Julius Genachowski, Rep Dingell said he is "disturbed" that the FCC has not answered his spectrum questions "in a substantive manner."

Rep Dingell originally wrote to Chairman Genachowski in June with a list of detailed questions about the potential impact of the agency's spectrum proposals. In a response dated August 3, Chairman Genachowski responded to some aspects of the letter, but in Dingell's view, he was evasive on some key points. Chairman Genachowski appeared, in Dingell's view, to skirt one question in particular about the potential structure of incentive auctions, a proposal that would offer compensation to TV broadcasters to sell off their airwaves to mobile companies. The FCC wants Congress to approve such auctions. Rep Dingell and other members of Congress are concerned that broadcasters could be harmed by the proposal. "With respect to voluntary incentive auctions, it is imperative that Members of Congress know what effect they will have on the broadcast industry and their constituents' ability to receive free, over-the-air local programming," the congressman wrote. Rep Dingell suggested it might be necessary for members of Congress to file Freedom of Information Act requests if it wants to get real answers about the FCC. Rep Dingell also sided with the National Association of Broadcasters (NAB) in his letter. NAB says the FCC's proposals could harm TV stations. Genachowski's "failure" to respond more fully "leaves me no alternative but to conclude that the NAB's analysis is probably more correct than not."

Who’s paying for peer-to-peer traffic across the Internet? It’s not the largest ISPs, which can actually profit from such traffic, but smaller regional Internet providers and those who operate campus or corporate networks, according to a new paper out that studies how P2P applications affect ISPs. The paper claims to look at the whole ecosystem, across network boundaries and geographical borders to detail the effect of the entire system of files.

Some of the results are surprising:

• A third of BitTorrent traffic stays local: Thirty-two percent of BitTorrent traffic stays in the country of origin and 49 percent of traffic is intra-domain or crosses a single peering or sibling network link.
• BitTorrent traffic doesn't usually hit the big backbone transit providers: That’s partly because it stays local and partly because the largest amount of BitTorrent traffic stays inside a local area network run by a hosting company or enterprise.
• BitTorrent traffic occurs at the same time as peak web traffic and it’s growing: The old myth that BitTorrent users were up late at night seeding files has evolved and most users are sharing files during the day. Many are doing so during “peak traffic times,” which the researchers don't disclose unless daytime means peak traffic time.