Posts Tagged ‘pipes’

Virgin puts legal P2P plans on ice

Friday, January 23rd, 2009

Big label pressure has forced British cable ISP Virgin Media to suspend plans to introduce a legal music sharing service for its subscribers, just weeks ahead of its launch, The Register has learned.

The radical initiative, tentatively branded as “Virgin Music Unlimited”, represented a major investment for the ISP, and would have been the first such attempt to monetise P2P file sharing in an ISP partnership in either Europe or the USA. However, 11th hour “anti-piracy” demands by major record labels including Universal Music and Sony Music meant Virgin could no longer launch the service as it had envisaged. Labels demanded that Virgin block uploads and downloads of songs from subscribers’ PCs, sources suggest. Since the system is designed to encourage file sharing, the demand removed the service’s USP.

Virgin is believed to be particularly disappointed at the collapse of the initiative. The ISP had been the first to co-operate with the music business-ISP Memorandum of Understanding (MoU) signed last July and send warning letters to file sharers. It had also made a significant investment in the Music Unlimited initiative, estimated at eight figures.

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Net refuseniks are getting more stubborn

Friday, October 24th, 2008

Almost half the nation’s households don’t have net access – and most of them aren’t going to sign up.

In what will be unwelcome news for ISPs, ecommerce providers, and the government, a survey of UK households suggests internet hold-outs are getting more stubborn.

The availability of cheap broadband has eroded the refusenik camp very slightly, with 3.6 per cent of non-net households signing up over six months. However, the increase in broadband is largely at the expense of dial-up, and isn’t winning net converts. The number of households with no access fell by 1.6 per cent year-on-year from the previous survey, while broadband uptake rose 7.1 per cent.

Overall, 44 per cent of UK households don’t have net access and views are becoming more entrenched.
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Fixing the UK's broadband crisis: Spiked's Traffic jam debate

Thursday, July 10th, 2008

If you throw a rock in the air in London on any day of the working week, chances are it will land on a New Media conference. These are primarily social gatherings for the same group of academics and media hangers-on, and you can bet they’ll be Twittering.

(I’m often invited – usually it’s because they think I’ll oblige them by saying something stupid, like “The Internets is Evil”. It isn’t hard to decline.)

But apart from the inanity and groupthink, these New Media sessions proudly define their irrelevance by focusing purely on the Web. Pipes and politics are boring to this crowd – so deeper structural, technical and economic issues about the “internet” are ignored. Yet the parameters of what the “Web” can or cannot do are defined by its infrastructure. The Twitterers wouldn’t be there if it wasn’t for the pipes.

So Spiked is to be congratulated for stepping into the battlefield with its “Traffic Jam” the other night. I was a late addition to the panel. You can skip my brief contribution – and I’ve raised most of these points before – by turning the page to see how the discussion unfolded.

Given seven minutes I opted to make four brief points. Firstly, I noted with dismay the tendancy to focus on the Web. The terms “Net” and “Web” had become interchangeable – but this is more than a semantic discussion. Pinching a phrase from our (first) Adam Curtis interview, I reckoned this was because the media preferred to fantasise about the world rather than report. And the politicians (and bogo-academics who advise them) simply followed suit.

Secondly, it was really important to look at where money was being generated. It sure wasn’t being generated in abundance on the web by anyone except Google, which now has 85 per cent of the web advertising business. Profitable sites like the one you’re reading are exceptions, not the norm. And while “data doesn’t pay” is an oversimplification, it’s generally true – and we should face up to it. Which means that network operators needed to think about new services we actually want to pay for – or face up to a future where net services cross-subsidised by something (like TV or voice minutes) that is reliable.

I noted two forms of escapism in this debate that I thought were just plain weird.

There’s Net Neutrality, which is an issue that’s been described as “Intelligent Design for the Left”, for one. It’s basically legislation based on technical ignorance that requires people to be nice. But Net Neut legislation tabled before Congress two years ago would have outlawed entire classes of applications, such as real-time video, and forbidden operators offering you a QoS service – something quite a few of our readers want and are happy to pay for. The Neutralists don’t understand how the internet works – and would effectively freeze innovation at the 1993 state. Not a very smart thing to do. They’re Luddites, really, and it’s a static (and even nostalgic) view of the world.

Finally, I noted how angry Reg readers are with the whole broadband business here. But bashing the ISPs – while understandable – was really a misdirection. It simply avoided laying the blame where it should be laid: on the cosy backroom deal between the regulator and BT Wholesale, a decision which created a “market” that was designed to fail.

What intrigues me is that this anger is a consequence of the Web 2.0-topians idea of what a consumer should be able to do. How many times have you heard a web evangelist say that because we’re venting on the web – we “were in control”? (The BBC and New Labour seem particularly keen on this, for some reason, perhaps because they both spend more on web consultants than anyone else.)

But this view makes caricatures of us, and leaves us powerless. We should be able to look at where power is really exercised, and be able to change it. The idea we’re changing anything by getting angry and punching the first thing we see is a notion that turns democratic engagement into therapy – and leaves things as they are. That point always seems to go down well, and did here.

Now onto the debate.

Rob Killick had written a provocative piece trailing the debate, where he described all the moaning about British broadband as an example of Digital Malthusianism. Science could invent its way out of our troubles. Look closer, he said, and you saw special-interest pleading:

“What seems to be driving today’s panic about an internet crunch is the needs of ISPs and media competitors, who have an interest in stoking up fear about the BBC and others causing an internet collapse, and also a general sense of cultural pessimism.”

Legal academic Chris Marsden, a policy advisor on regulation, had some thoughtful points on the nuances between British and European regulation. He also had one suggestion that may make Reg readers choke: we should think about Phorm as an evil necessity that helped pay for better network infrastructure.

(Ahem.)

Journalist David Crow said that more pricing flexibility was needed, and thought it was absurd that heavy users, such as “Pete” who downloaded video and music all day, should pay the same as light users. Pete was to haunt the debate to the very end.

David added that he didn’t think most people were Petes – and most people on the internet paid for their content. Now the very fact that there’s a pejorative word for David – “Paytard” – tells you that a few people will disagree.

Write to him, not me.

The questions reflected the diffuse nature of the debate – the topic is so broad that we could barely skim the surface (or even mention many things). One questioner wanted government intervention in the market – while most people opposed government regulation. There was also some concern about “private networks”, but as Keith McMahon pointed out from the floor – the intertubes is almost all private networks. There’s Google’s, there’s Akamai’s… even the BBC is up for it.

While I admire the Spiked crew’s optimism and faith that we can invent our way out of almost any problem, we’re not in a broadband pickle because of a lack of optimism or invention. How long has IPv6 been embedded in routers, and supported by the clients? Ten and five years, I reckon. Getting innovations from the lab to the market, so they’re actually useful to us, is what characterises this business. Most of the players have no incentive to invest in better infrastructure, something the regulator hadn’t bargained for when it “designed” the British broadband market.

So a few more shoes had to drop – I mentioned legal P2P services as an example of something that may increase demand and investment. But to be honest, I can’t think of many more.

Only after the discussion closed did I realise that no one had mentioned municipal fibre. Unlike Muni WiFi, which has crashed and burned because there’s no business case for it, Muni fibre projects are commercially justifiable – if they follow a cross-subsidy model. Maybe that’s another debate?

How the iPhone puts a bomb under mobile networks

Tuesday, June 24th, 2008

If you think everything that could have been written about the iPhone already has been written, prepare to be surprised. One vital aspect of Apple’s strategy has been overlooked – with multi-billion consequences for complacent network operators.

Over at Telco 2.0, the blog of analysts STL Partners, we learn that networks who partner with Apple must install Apple gear at the data centre to support its services – specifically, the Push Notification service that wakes up the Jesus Phone. Forget the revenues from sales of extra server gear – the key point is that Apple now sits in the middle of the data stream, capturing the customer’s data. The analyst outfit describes the iPhone as a potential “poison” for the networks.

STL wrote this week:

“Apple can data mine the application message stream — and it’s been a telco’s dream for years to mediate such flows.”

Nokia sell two out of every five mobile phones in the world, and they’ve ruled the roost for a decade now. But they’ve failed to convert that market clout into mobile data revenue – for themselves, or the operators. When you discount application-specific services such as RIM’s Blackberry Connect and new music services such as Omnifone’s MusicStation, mobile data use is negligible.

Because the iPhone makes mobile browsing more of a pleasure than a pain, for the first time, this is changing. And because de facto standards are defined where the people are, this means Apple, not one of the traditional incumbents, could call the shots. Or as the STL boys put it:

“… it doesn’t take massive market share (stimulated by the new low price point) for the iPhone to de facto become the mobile web.”

So, sorry, Nokia and Microsoft – you may have turned out to be the Osborne and the Altair of the 21st Century.

And bang go the commercial prospects of turning the bitstream into money:

“You don’t have to be too bright to realise that one of the most likely things to be pushed to a phone in future is an advert, mediated again by Apple,” they add.

STL tempers this possibility with the very sensible point that the iPhone has may have limited it appeal. Apple has yet to prove it can break out of the niche in which it reigns supreme. Indeed the biggest threat to mass market adoption of the iPhone may yet be Apple itself, by refusing to add a numeric keyboard or hard-QWERTY keyboard. But if there’s growth at the high-end, it will reaped by Apple, with its superior, easier to use technology which is now sensibly priced.

Yet the mere prospect of Apple sitting in the middle of their network, capturing customer data must make a mobile operator’s blood run cold. They’re unlike to accept a cuckoo in the nest – but who can help them?

Alas, the operators’ strongest potential ally has decided to have a mid-life crisis. That’s Nokia, of course, which is in a stronger position than ever after acquiring most of Siemens’ COM division in 2006. Nokia can help with both back-end and devices, but it’s decided that it, too, wants to shaft the operators. It’s splurging on services such as music and maps that cut revenue opportunities for the networks.

As STL wrote last year in an excellent summary:

“The way Ovi has been positioned at its announcement could prove to be a mistake. It will confound Nokia’s efforts to address and bring to market answers the most important unmet user needs. Ovi annoys Nokia’s most important go-to-market partners for any new and better personal communications services.”

Just when you need a friend…

EU plans to regulate online niceness (and ISPs)

Friday, January 4th, 2008

Europe’s most powerful quango, the European Commission, says it wants to accelerate a “single market” for online music, film, and games – and is threatening legislation to bring it about. Although the EU’s Telecoms commissioner Viviane Reding sees the market for digital entertainment quadrupling (to €8.3bn by 2010), she feels the bureaucrats need to get involved anyway.

In a statement issued yesterday, the EC identified four areas for action – with the most ominous being a good behaviour pledge for online service providers.
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Obama mounts 'Neutrality' bandwaggon

Tuesday, October 30th, 2007

Politicians long ago gave up on politics. Instead of articulating great ideas, the choice that faces voters today is between identikit managerial bureaucrats who’ve never had a job outside politics. Most of their adult lives have been spent in the hermetic world of wonkdom. So it’s little wonder, then, that they have trouble distinguishing between fiction and reality.

And it’s no surprise at all to hear that a virtual Presidential candidate is throwing his electrons behind a virtual cause, to repeal a virtual law that never existed.

What else would a cypher do?

Asked whether he’d “re-instate Net Neutrality” as “the Law of the Land”, trailing Presidential Candidate Barack Obama told an audience in Cedar Rapids, Iowa pledged that yes, he would.

He also said he’d protect Ewok villages everywhere, and hoped that Tony Soprano had survived the non-existent bloodbath at the conclusion of The Sopranos.

(So we made the last two up – but they wouldn’t have been any more silly than what the Presidential Candidate really said.)

There are several problems with Obama’s pledge.
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VoIP is Dead. It's just another feature, now

Monday, October 29th, 2007

Business-wise, Skype is a basketcase. But that’s just one of the things that makes it one of the most emblematic companies of our time – a real, Ur-Web 2.0 company.

Like so many internet companies, Skype has millions and millions of users. Like these internet companies, too, it can’t make very much money off all these users. Hello, Facebook! And like these internet pin-ups, it owes a great deal to utopian power fantasies.

But what makes Skype so very of its time is the peculiar relationship it has with incumbent telecomms companies.

Think of Skype as a kind of parasitic virus that threatens to bring the host to its knees – but which can’t survive without a living host. Bloggers and mainstream newspapers are another good example.

How so?

Well, Skype has no network of its own – it’s simply an open protocol (SIP is more than one protocol, but bear with me) wrapped up in some proprietary bits. Apart from a few authentication servers, its only real asset is its “brand” – which isn’t the most concrete or tangible line item to have on your balance sheet.

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We sneer at your global standards, and your economies of scale…

Friday, September 7th, 2007

More dismal news for the US consumer. After the simultaneous failure of Municipal Wi-Fi projects in three major US cities – something we predicted four years ago – faster, cheaper mobile data looks further away than ever.

So why are Google lobbyists advocating for the next wave of collapsing wireless initiatives – rather than helping things?
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Nokia: Don't bet the house on content

Monday, September 3rd, 2007

At times you can feel sorry for Nokia. The company is damned when it dares to plan for the future, and it’s damned if it doesn’t.

But that illustrates the depth of its dilemma. Today, Nokia is phenomenally successful in one business – handsets – which generates £27bn ($54bn) a year, with a margin of between 15 to 20 per cent.

However, Nokia relies on a small number of powerful customers as its route to market. This isn’t a problem for every business. If you sell fighter aircraft, you know who your handful of customers are, and can schmooze them directly. If you sell bangles from a market stall, you can choose which market you sell from. Nokia doesn’t have the luxury of either: its channel is its market.

And “getting from here to there” is the problem.

At great expense last week, Nokia began to imagine itself as a very different kind of company: a vertically integrated services business. Mobile users would flock to the company’s new portal, Ovi, for games, music, information and “social” interaction. You might call this a “post-operator” world, but it’s also a “post-Nokia” world, as it presumes that both data and devices are commoditised. It’s a Plan B.

However, the strategy takes today’s complex mobile data eco-system and promises to torch it. Today, there’s room for a Real Networks selling games or ringtones, for example, or an AQA providing an answers service. Nokia’s Ovi portal effectively declares war on all these smaller service providers. That can be considered bad manners (or a business necessity) – but it isn’t fatal to Nokia’s plans. It’s the biggest, would-be service companies who are the most threatened.
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Can Big Telco do Perestroika?

Friday, March 30th, 2007

While the CTIA Wireless jamboree took place in Florida this week, European telcos were drawn in a huddle in London at one of the most intriguing events of the telecoms calendar.

The theme at STL’s twice-yearly Telco 2.0 Brainstorm is familiar: “How to making money in an IP-based world”. But it has an added piquancy now.

And there’s plenty at stake. The part of AT&T formerly known as Cingular, the cellular division, makes more revenue than Google and Intel combined each quarter. But as with all mobile network operators, it’s been made from a large, vertically integrated operation, and a fiercely-protected, closed network. The rise of the Internet Protocol stack (IP) changes all that.

IP evangelists can be pretty scathing: IP will destroy the Soviet model; their “Net heads” will triumph over “Bell heads”. At stake, they say, is a battle which pits innovation versus atrophy. Unlike the open internet, telecomms provide a barrier to fledgling service providers or application developers. There’s no common API, and the service companies need to beg permission.

But there are other ways of looking at it.

Mobile telephony – at least in Europe and Asia – is the most successful application of technology since the combustion engine. It’s affordable to the poorest, but it feeds the id of the wealthiest fashion victims. Take up is almost 100 per cent – while internet adoption is stubbornly stalled at around 60 to 70 per cent of the Western population, and is seen as little more than a platform for games in much of the world. While mobile operators take a tax from almost all of us, very few of us (outside the US, at least) seem to resent this. And it’s perceived as reliable. Rich or poor, drunk or sober – when you push a button, the call gets through. When you send a message, you know it gets delivered. Imagine if that simplicity and efficiency was applied to your local tax rebate bureaucracy – or the financial services industry. And mobile telephony gets cheaper and better every year.

Yet this success story is under direct attack from a very American model of how business should work. This is a model which values abstractions over outcome.

To give you an example of what I mean, this week, I heard more than one person seriously endorse the idea that mobile phones should have two ‘send buttons’ (that’s the green button ‘call’ on every handset) so we could engage in “dynamic differential pricing”. This would delight American economists, but I found myself thinking how I could explain this innovation to a new user down the pub.
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