Tag Archives: business

British ad watchdog bites down on ISPs

by Steve Blum • ,

How many times have you gone on line to figure out how much Internet service from a major service provider will cost, and come away even more confused than when you started? If your answer is every freaking time, then you’re floating right in the middle of the mainstream. British regulators tested consumers on their ability to figure out the total cost of an Internet service contract, and found that 80% couldn’t do so.

As a result, the U.K.’s Advertising Standards Authority is setting new standards for ISP ads, according to the BBC

To make sure broadband providers ensure they stay within the new rules, the ASA recommends that future ads should:

  • Show all-inclusive, upfront and monthly costs, with no separating out of line rental prices
  • Give greater prominence to the contract length and any post-discount pricing
  • Give greater prominence to upfront costs

Commenting on the changes, ASA chief executive Guy Parker said: "We recognise the importance of broadband services to people’s lives at work and at home. The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers.

Problems with ads included introductory prices that rocketed up after just one month, “free” services like phone calls or security that became billable after the first month and undisclosed charges for physical line connections, on top of bandwidth costs.

The details are a bit different here in California, but the underlying subscriber acquisition imperative drives the same sort of ISP behavior. And, ISPs should remember, the same regulatory impulse.

CPUC small business expo draws hundreds to Salinas

by Steve Blum • , , , ,

Giving small business a lift in Salinas.

Rapidly changing business models and utility needs are providing opportunities for small businesses in the twenty-first century. That was Commissioner Catherine Sandoval’s message to several hundred entrepreneurs in Salinas yesterday, at a small business expo and matchmaking fair sponsored by the California Public Utilities Commission.

Sandoval pointed to new rules that were just adopted that allow online ride sharing companies, such as Lyft and Uber, to provide on demand service, despite vehement objections from entrenched – and protected – taxi companies.

“We created a way for them to legally move forward and create new opportunities,” she said. It’s the CPUC’s job to ensure that regulated utilities “provide safe and reliable service at just and reasonable rates”.

To do that, the CPUC classified crowdsourced ride sharing platforms as charter party carriers, which fall under a different set of rules than traditional taxis.

Other opportunities include innovative technologies and business models that help Californians save energy and water, two resources that are in perpetually short supply here.

The event was co-sponsored by Comcast and organised by the Monterey County Business Council and its Procurement Technical Assistance Center. Major telecommunications, water and energy companies were on hand, along with several state agencies. They met one-one-one with small business people who traveled to Salinas from all over California. One even flew in from Connecticut.

More expos will be held in coming months elsewhere in the state. It’s part of an ongoing CPUC effort to connect regulated utilities and state procurement officers with small businesses.

A roach clip for Blackberry

by Steve Blum • , , , ,

The familiar scent of Blackberries.

Wall Street investors seem happy to take what Fairfax Financial Holdings is offering for Blackberry and let the dwindling mobile phone company waft away in the wind. Subtract out the cash that Blackberry is holding, and the net sale price is about $2 billion, a sad end to a psychedelic slide that began at $83 billion five years ago.

Like Microsoft’s purchase of Nokia, Fairfax’s offer seems to be based on the chemically impaired notion that Blackberry isn’t in the final stages of a terminal crash. Fairfax head Prem Watsa babbled about “execution of a long term strategy” in a press release but, according to the San Jose Mercury News, he’s a fan of Blackberry’s two biggest and most recent flops, its new CEO and operating system…

Watsa is likely to keep current CEO Thorsten Heins in the job. He said in April that he’s a big supporter of Heins and has called his promotion the right decision. He also said he’s excited about the company’s new BlackBerry 10 operating system.

Watsa has a reputation as a savvy investor, so he might just be blowing smoke to keep the headquarter troops in Waterloo, Ontario from coming down with the shakes. There are three ways to suck $2 billion in value out of the deal: 1. sell off Blackberry’s intellectual property, 2. milk its remaining 50 million customers for whatever they’re worth and 3. try to turn it into a much smaller mobile and IT services company, providing security and backend support to other platforms.

But as it stands, Blackberry isn’t even worth stems and seeds anymore. Without a thorough corporate detox, Watsa will be just licking the ashtray.

Buyers might have to settle for stems and seeds, but Blackberry CEO won’t

by Steve Blum • , ,

It was a lot bigger before I took a hit.

In the week when Apple is giving its new iPhone a final bath in unicorn tears and Samsung begins a campaign to put a mobile phone on every wrist, Blackberry went on sale. And for rolling a big fat one for shareholders, CEO Thorsten Heins will get $56 million.

He’d already pretty much given up on phones. Blackberry can’t sell much of anything to anyone who isn’t already using their devices. And that group is getting smaller all the time.

Strategically, Blackberry has two assets: its intellectual property and a list of customers that trust it as a secure platform. That’s valuable to a mobile phone maker like Samsung that needs IP leverage and is looking for ways to maintain growth. Adding Blackberry’s vertical markets is a good way to do it. Blackberry has the same appeal to Apple or Google or an up and coming Asian manufacturer.

If the buyer isn’t one of the big guys, there’s room in the security sector for Blackberry’s technology. Even though it’s a fire sale strategy for Blackberry, it’s a possible path for a security middleware company to enter the mobile telecommunications space. If the operating system can be unbundled and the essential bits integrated into Android or iOS or even a new OS contender, then the buyer could hang onto at least a share of existing subscriber revenue by providing highly secure communications as an independent back-end service.

Although the obligatory words were spoken about building a market for Blackberry’s current offerings, it’s clear they’re throwing in the towel. That’s good news for shareholders who can finally hope for something better than just drinking more of Thorsten’s bong water.

Bezo’s WaPo purchase a chance to do good by doing well

by Steve Blum • , ,

Distinguished company.

The best explanation of today’s announcement that Amazon founder Jeff Bezos is buying the Washington Post comes from the Post’s own story of the deal

Throughout his storied business career, Bezos, who has a net worth of $25.2 billion, has been an empire builder, although he has never shown any evident interest in the newspaper business. He has, however, maintained a long friendship with [Washington Post CEO Donald] Graham, and they have informally advised each other over the years. Graham, for example, advised Bezos about how to feature newspapers on the Kindle, Amazon’s popular e-reader.

The purchase is personal: the Amazon company is not directly involved and the newspaper will be privately held by Bezo’s alone. With no Wall Street analysts to please, he will be free to experiment . The end result, though, is likely to see digital content merged into Amazon’s Kindle and online media platforms.

Bezos is getting both the online and dead tree versions of the Washington Post, along with some affiliated local and spanish language papers and production facilities. Slate and other online properties will stay with the Graham family.

Presumably, he’s also getting the intellectual property rights to the vast store of content created by the Post since its founding in 1877. That plus the future output of a news gathering organisation with 2,000 employees is a solid foundation for experimenting with digital distribution of news and information.

I’m sure there’s something to the speculation that Bezos is buying the Post out of a sense of civic responsibility, but I hope that’s not his primary motivation. He can do a lot more for the cause of good journalism and speaking truth to power by, once again, making it a highly profitable business.

Google accused of asking fiber subscribers to use common sense

by Steve Blum • , , ,

A server and a thin mint.

When you go to an all-you-can-eat buffet, you don’t expect to be able to fill up an ice chest with lasagne to bring home for a neighborhood block party. Most people accept that common sense puts limits on what are otherwise unlimited offers.

Google is taking heat in a Wired commentary piece by Ryan Singel for telling fiber customers in Kansas City…

Your Google Fiber account is for your use and the reasonable use of your guests. Unless you have a written agreement with Google Fiber permitting you do so, you should not host any type of server using your Google Fiber connection, use your Google Fiber account to provide a large number of people with Internet access, or use your Google Fiber account to provide commercial services to third parties (including, but not limited to, selling Internet access to third parties).

The ruckus arose after a man who might or might not live in Kansas City filed a complaint with the FCC

In my professional opinion as a graduate in Computer Engineering from the University of Kansas (and incidentally brother of a google VP) I believe these terms of service are in violation of FCC–10–201.

Over the following 53 mostly single-spaced pages, he tries to make the case that Google is breaking the FCC’s network neutrality rules that it fought hard to see approved.

Singel sees the letter Google sent to the FCC in its own defence as hypocritical, and hyperventilates about all the things that might be considered a server – accessing a home computer from work, networking a digital thermostat, playing Minecraft with friends – and thus banned.

It’s a familiar problem for ISPs: do you issue an encyclopedia sized rule book about what can and can’t be done on a home connection, or do you set vague but easily read and understood rules that rely on good faith and a touch of common sense?

No one knows yet how much Internet bandwidth a large population of residential gigabit subscribers will chew up, but it’s a fair guess that their loading will be more bursty and they’ll consume fewer bits overall than a server farm. Setting common sense rules that draw that distinction is a fair trade for a much lower price – $70 per month versus $500 or more – than a commercial customer would have to pay.

AT&T boosts Uverse speeds for some Californians

by Steve Blum • , ,

High potential for an earthquake. Broadband, not so much.

California and Nevada are the next stops on AT&T’s deployment of its pair-bonded VDSL2 Uverse upgrade. The company announced the roll out of 45 Mbps service here in a carefully worded press release, and also held out the eventual prospect of delivering up to 100 Mbps to homes and businesses via copper wires.

It’s part of a plan announced last fall to focus on upgrading “high potential” cities and neighborhoods to maximum speed levels that are on a par with what cable companies claim to provide. Which is why the press release doesn’t actually say that all AT&T Uverse customers, let alone subscribers in legacy DSL service areas, will be able to get the higher speeds. If your street looks like a low potential kind of place, Uverse at any speed or even new DSL service, might not be in your future at all.

If you can get it, it could be a very good deal. Jumping from 12 Mbps to 45 Mbps service costs an extra $25 per month ($51 versus $76) once the $50 promotional rate expires. Assuming it’s actually delivered, that’s enough bandwidth to do pretty much anything most residential or small business customers want to do, including streaming multiple channels of high definition television. Presumably, bandwidth caps still apply, but there’s no indication that AT&T has started enforcing those limits on Uverse subscribers.

I tried entering addresses in several different cities in AT&T’s California footprint, and couldn’t find 45 Mbps actually offered anywhere. Which either means the roll out is limited at this point or the website hasn’t been updated. I’ll keep checking though. It would be nice to find out whether I’m living in a high potential neighborhood or not.

Diversify and conquer

Amazonian elephant coming up from behind.

There were three global technology elephants left standing at the close of the Consumer Electronics Show in January – Samsung, Google and Apple. Microsoft was last seen rumbling toward the elephant’s graveyard and the two likeliest candidates to replace it, Amazon and Facebook, were still shy of the necessary bulk.

Recent days have shown why Samsung and Google will rule the herd for a long time to come.

Google has so many market-default services that it’s accounting for 25% of daily Internet traffic, with 60% of the world’s devices touching it every day. Samsung has the same kind of diversification across sectors it either dominates or ranks within the top tier of competitors.

Although Samsung has nearly a third of the global smart phone market and just reported a quarterly operating profit of $8.5 billion, there was something of a panic last week because it’s looking like it is close to exhausting the immediate growth potential of this planet’s 7 billion or so potential customers.

Samsung’s response was to talk about chip and screen making as new growth areas, allowing it to continue its march to higher profits while it tries to figure out a reason to get everybody in the world to trade in their current Samsung Galaxy for a new one. It’s a company that uses dominating heft in one technology sector to gain market share across all business lines. In contrast, Microsoft’s warring fiefdoms keep it from building strength upon strength. The post-Jobs Apple looked like it might be going in that direction, too, but Tim Cook seems to have headed it off for now.

Facebook staged a stock price come back last week as it demonstrated a new command of the mobile advertising market. But it’s still a one platform pony. With global leadership in online retailing and a front-of-the-pack position in core Internet services, Amazon is best positioned to occupy the empty fourth elephant’s slot. It has enough weight, it just has to learn how to throw it around.

Aereo making retransmission negotiations more entertaining

by Steve Blum • , , , ,

Oh, baby, you are so talented. And they are so dumb.

Time-Warner Cable is threatening to shoot its own business model as it wrestles with CBS over permission to carry local television stations in New York and other major markets. Thanks to a law passed by the U.S. congress in 1992 with massive amounts of campaign contributions cogent policy research from cable, satellite and, crucially, broadcasting lobbyists, cable systems have to get permission to carry a local TV station, which means agreeing to and paying a price.

These negotiations are frequently rancorous and feature threats to pull local stations off of cable systems. Occasionally the threat is carried out, which usually brings a quick resolution because broadcasters start bleeding advertising revenue and cable operators are swamped with subscriber complaints.

This time, though, there’s another option. A new service called Aereo provides online access to local television stations in New York, and is expanding to other markets, with fiber-rich Utah next on its list. In a case that stunned broadcasters, a federal appeals court ruled that it’s legal for Aero to retransmit over-the-air stations without permission or payment. The U.S. supreme court is likely to have the final word sometime in the next year or two, but at least until then Aereo is good to go.

So Time-Warner is threatening to pull CBS programming off its system and tell subscribers they can watch it on Aereo via its Internet service.

It adds some pressure on CBS because retransmission consent money is at stake. But the greater risk is to the cable TV business. Time Warner is, in effect, threatening to tell its customers to start watching video programming on the Internet instead of via its cable system. Which would do more harm to cable’s business model than broadcasters. Unless their long term strategic objective is to partly (or even completely) back out of the television programming business.

Do they really want to do that?

Intel selling heavy metal thunder to a lightning fast market

by Steve Blum • , , , , ,

The next industry standard.

After playing with an Atom-powered smart phone at CES this year and hearing execs talk up Android, I saw glimmers of hope that Intel was finally coming to grips with the mobile world. It seems I had it backwards: the mobile world is tightening its grip on Intel’s corporate throat.

Long the dominant player in PC and big server processors, Intel is all but shut out of smart phones and tablets, a billion unit market, and has no presence at all in the machine-to-machine space, which could be five or ten times that size in the next handful of years. Its ARM-based competition is even beginning to creep into the increasingly energy conscious server segment.

Its luck isn’t likely change soon: a microcomputer mindset is hard-coded into Intel’s DNA. In his first quarterly earnings call, rookie CEO Brian Krzanich’s attempt to convince analysts that the company is finally on the right path ended up proving the opposite…

Intel was slow to respond to the ultra-mobile PC trend. The importance of that can be seen in the current market dynamics. The traditional PC market segment is down from our expectations at the beginning of the year while ultra-mobile devices like tablets are up.

Saying a tablet is an ultra-mobile PC is like calling a motorcycle an ultra-mobile car. That’s fine if you’re trying to cram a V–8 onto the frame because that’s the only kind of engine you make. Not so good if you’re trying to out race the competition.