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Warning - a bit of self-promotion ahead   and a discount - Guest Blog From Carl Ford

Dear Reader,

Welcome to the next generation of regulation- the one that will be focused on the Wireless device in your hands!

The FCC, in an effort to safeguard the free and open Internet, is looking to formalize and define the principles of network openness that would apply to all platforms that access the Internet as well as the carrier's role in enabling that access.

So now the question is "Can the concept of open be governed?" Does the FCC have a role in Apple's iPhone, even if AT&T is simply a transport partner?  Does Google have to consider itself a carrier because of the use of a phone number? 

Join us at 4GWE, January 20-22, 2010 as we discuss the very relevant topic of the next generation of net neutrality and the FCC's role in the companies, devices, networks and applications driving the 4G Evolution.

Todd Daubert of Kelley Drye, Rick Whitt of Google, Hank Hultquist of AT&T, and Glenn Richards, of Pillsbury Law join us as we discuss where the debate about Net Neutrality should end and what strategies companies should take to monetize 4G networks, applications and devices.

Register NOW For Early Bird Pricing

Don't miss this and other important discussions related to the communication industry's massive evolution to wireless broadband services. Register now for 4GWE and receive the price of $995 for a full three days of conference sessions, all meals and networking events.

Kind Regards,

Carl Ford

Co-Founder Crossfire Media

4G Wireless Evolution Community Developer

Recently I commented about how Verizon's doubling of its early termination fee to $350 makes sense as the company needs to keep investing in ensuring its network is the best in the US. I may be the only person who appreciates having a fee go up as evidenced by the noise from journalists which is not subsiding. One of my favorite writers and video producers, David Pogue of The New York Times comments today that Verizon is gouging and has a plethora of ideas the company can implement to save consumers money.

Pogue has the following and very interesting comment to share:

Why wouldn't it be a hugely profitable move to start pitching yourself as the GOOD cell company, the one that actually LIKES its customers?

Verizon has some of the best customer service in the country. It has the best network by far. Everyone seems to want to switch to Verizon if they were to carry the iPhone for example. This is because the company has made absolutely massive investments where the competition has cut corners on a relative basis.

So perhaps the most succinct question to pose is what is the cost of being on the best network, having the fastest data download speeds and the least dropped calls? For many, there is no price tag too high to pay for these features and parting with an additional $5/month for phantom data charges and even more for high termination fees is fair.

I look at Verizon Wireless like I look at BMW. Both tout relatively low prices to start. But if you purchase a 328i, metallic paint will cost you $550. Cruise control costs $2,400! Navigation (which Google now gives away) is $2,100, and 19" wheels will cost you over $5,000!

If you think BMWs make some of the best cars around, you hold your nose and pay. Ditto for Verizon Wireless.

Verizon has always been the most restrictive carrier around and they locked down Bluetooth on their devices for many years except for pairing with a headset. Likewise, GPS has been locked down on most devices unless you purchased VZ Navigator for a minimum of $9.99/month or $2.99/day.

But as a customer, these annoyances and high fees were balanced by consistent spending of billions of dollars on wireless and now fiber networks.

Users should keep in mind they can always switch to AT&T, T-Mobile or Sprint if they think Verizon Wireless service isn't worth the extra money.

In fact the massive defection away from Sprint shows consumers consider more than price when it comes to making phone/network purchase decisions. In fact, I would say from a pricing perspective, Sprint may be the most customer friendly company around. I would posit that if AT&T Mobility didn't have the iPhone, consumers would be fleeing from them as well.

The iPhone threw Verizon for a loop and as predicted it is getting clobbered because it did not have the foresight to work with Apple when it had the chance.

So now, the enemy of its enemy is Google and Verizon is allowing a number of new Android phones on its network. They will get a cut of ad revenue by doing this but they are giving up virtually all services which they used to be able to charge for. Google just gave away turn-by-turn GPS for example meaning Verizon can no longer charge $10/month for the same service.

Moreover, Google will roll out dozens of new services which will be ad supported. Verizon will not be able to launch competing services as we all know a carrier can't compete with a software company.

In a moment, Verizon went from being the most closed network in the US to perhaps the most open and there is a cost associated with this move. Again, this is all pro-consumer behavior.

In fact, it seems at this point Verizon has leapfrogged AT&T in terms of openness. Especially when you consider the restrictive policing of the App Store by Apple/AT&T. Anyone who has seen the rich applications and joyous battery-sucking multitasking available on a jailbroken iPhone understands how users are being penalized by Big Brother Apple/AT&T.

So the full question to those upset with Verizon's fees should be, would you pay more for the best network and the most open ecosystem where you can take advantage of the best applications and service values around without the worry of a nanny telling you what you can and can't do?

The author switched from Verizon to AT&T because he wanted an iPhone. For about a year he carried around a Verizon phone for voice and an AT&T phone for data but that proved cumbersome and now he experiences dropped calls and other network snafus which he didn't deal with on Verizon Wireless. He not so secretly despises the App Store Nanny.

TMC's latest gadget blog Gadget Inspector (get it?) kicks off with author Marisa Torrieri performing a video interview with a Verizon Wireless representative comparing the latest Droid phones - the Motorola Droid and the HTC Droid Eris. You can subscribe to her XML/RSS feed to stay up to date on the latest in the world of gadgets and consumer electronics.
 

HP is acquiring 3Com for $2.7 billion and there are a number of reasons for this move. First of all, it is obvious the tech market is hot and Cisco and other companies are optimistic about the future as evidenced by the pace of tech acquisitions which is reaching the pace of the glory dotcom days. Moreover, large companies with strong balance sheets are able to access capital if they need it, allowing them to more easily acquire.

3Com for its part is a company with a broad range of networking gear which HP needs to go head-to-head with Cisco. Specifically, 3Com focuses on the SMB space while the TippingPoint division focuses on Security and H3C focuses on large enterprise and is very strong in Asia. I was at 3Com's headquarters about five weeks ago and spoke with Anna Dorcey and John Vincenzo who were very high on the company's future.

You may not know this but 3Com has about 35% marketshare in China and a strong manufacturing base there, meaning their costs are low. Their go to market strategy is customer focus and value. 3Com has been a networking and communications value player for years but at the beginning of the decade, the company left enterprises hanging with a shifting strategy which enraged many resellers and customers.

Over the last few years, the company has improved its management and it seems unclear as why now was the time to sell. Perhaps HP gave an offer which was too good to refuse? Or perhaps company execs realize with the HP brand behind them, the company can raise prices and compete with Cisco and have fatter margins.

The worst part of this deal for Cisco is that we can expect the EDS division of HP to really push 3Com products at the expense of Cisco.

Also, if you are playing chess, you would imagine Dell and IBM are picking up the phone and having conference calls about purchasing Adtran and or Brocade as they are similar in product-line to Cisco and 3Com. Remember Dell just picked up a systems integration firm Perot Systems and the next step for them would be to add more products to their mix.

Other targets with substantial integration value worth watching are Plantronics, Polycom and Avaya.

While I am in the predicting mood, expect Cisco to pick up wireless backhaul vendor DragonWave or Ceragon in the near future as they build out their wireless networking strategy focused on wireless carriers.

But in the end, there are only a handful of tech companies who have shown they can acquire well. Oracle is best, Cisco is second best and IBM is good. HP is also doing pretty well in their area. It is early to predict how Dell will fare.

I am frankly surprised at the absolute pace of M&A activity but I should point out that this is great news for tech and telecom as it is a signal that companies feel confident about the future of the market and the growth in spending they anticipate in the future.

First it was free WiFi on Virgin America courtesy of Google... Now it seems there is a mad rush to give WiFi away in lots of places such as airports and even Times Square. It seemed to first start with Mountain View, California - Google's hometown, where the search giant hung radios to "light up" the city with wireless internet. Then of course it was Virgin America and more recently, Google will be giving away WiFi at 47 airports for the holidays. Some of the larger airports included are Houston, Las Vegas, Miami, San Jose (no surprise), San Diego and Orlando. Sadly there are no New York airports on the list.

Not to be outdone, Yahoo! has announced that as of today it will provide free WiFi throughout Times Square for the holidays.

The trend is clear... Internet advertising giants are looking to extend their reach and they realize that the next frontier for growth is the mobile web. The best way to reach mobile web users of course is by providing something users really want. And free wireless broadband is likely at the top of the list.

For the record, Google Guide is not a product or service developed by Google. To learn what I believe this service can become, please keep reading.

I spent some time with the new Motorola Droid this weekend and I interviewed customers and employees of the store and came away fairly impressed with what I heard and saw. Certainly my outing at the Verizon store was better than my recent experience checking out the Blackberry Storm 2. The Droid is about the same size and weight of an iPhone but has a full keyboard which slides out from the side of the device. Typing on it was a satisfying experience and although some have complained it is thin and does not provide adequate tactile response, I believe the compromise between size and feedback to be good.

In terms of device speed, the iPhone 3G S and the Droid render web pages about exactly as fast as one another. I tested both using the native 3G networks each device utilizes by browsing numerous Global Online Communities on TMCnet and other websites which are graphically rich. Although the Droid boasts double the number of pixels as the iPhone, in typical web browsing it is difficult if not impossible to see the difference. Perhaps a photo editing program or advanced game would be better able to take advantage of these pixels.

The benefits of Motorola's Droid over the iPhone are that it allows for multitasking, has free turn-by-turn navigation, a full keyboard, has tight integration with Google services and works on the Verizon Wireless network. The downside to the device is it still not as slick or as charming as the iPhone and doesn't sync with iTunes. Its software is more Microsoft-like than Apple. I did however notice that each Android update seems to imitate the iPhone more closely and aside from software patent issues, it seems Google knows it needs to basically duplicate the iPhone experience to make the phone as desirable as Apple's device.

The challenge for Google is the ecosystem issue and whether it can get developers (currently Android has one tenth the number of applications - meaning 10,000 to Apple's 100,000) to take its products seriously enough to program for them. Verizon Wireless staff members told me sales for this device were strong and prospective customers I spoke with seemed very happy. Ironically, I walked to the nearby Apple store and saw less people there than at any time in the past few years. I asked a salesperson if this was normal and he said no, it is light. Certainly my mall visit does not make a trend but nonetheless it is ironic to see light traffic at the Apple store on the day Droids are selling briskly.

Another Android phone came out this past Friday as well, the HTC Droid Eris and it is a pure touchscreen device (no keyboard) with hardware which is inferior to the Motorola device. Sales of this phone were slower than that of its more powerful sibling I was told.

A number of people in the telecom industry who played with the Motorola Droid these past few days told me they weren't so impressed with the device and from a UI perspective this is understandable. The challenge for Google now is to rapidly improve this phone to the point where it is enjoyable to use. Yes, you read that right. People like to pick up the iPhone and they expect to like the way phones work. Even though the Droid hardware is not as slick as the iPhone, we can forgive this transgression because at least it gets the Verizon network. Users however won't forgive a substandard UI and poor hardware. If this thing is supposed to kill the iPhone, it needs to get users to say "wow" when they pick it up. Until I start hearing "wows" I am not declaring it an iPhone killer by any means.

But let's not leave it there as Google has done a masterful job of changing the rules of the game by giving away turn-by-turn GPS and other services such as Gmail. You see, Google is a machine of doling out free services which customers once had to pay for. We can expect Google to compete viciously by providing free service after service which is optimized for mobile devices. Unified communications, Google Wave, Google Voice, etc. The company is uniquely positioned in fact to provide you with a service which uses your browsing habits to determine your local interests. Meaning if you often search for the phone number of a local sushi restaurant, Google can use that information to let you know when you are near other sushi restaurants in unfamiliar areas. Let's call this forthcoming service which for now is imaginary, Google Guide.

Is this a service which may make users switch cell phones? Perhaps, but not immediately. In the mean time, Google will devote its significant resources to filling application holes with its own services in the hopes of developing killer apps which can't easily be duplicated on the iPhone or anywhere else.

Skype is certainly a major symbol for the IP communications market and although it plays in a niche in the market - consumer VoIP/Video, it is now a household name and having it entangled in legal limbo does it or the industry no good. You may remember that the company was in the process of possibly going IPO and then eBay decided to sell it. But there was a sticking point consisting of Skype's p2p technology not being theirs and the original founders, Janus Friis and Niklas Zennström playing hardball to cease Skype from working until they got paid what they believe they were owed.

Thankfully the companies settled and as a result eBay announced that the investor group led by Silver Lake, which had previously entered into a definitive agreement to acquire a majority stake in Skype from the company, has reached a settlement agreement with Joltid Limited and Joost N.V. that gives Skype ownership over all software previously licensed from Joltid and ends all litigation currently pending against the investor group and eBay at the closing of the acquisition.

As part of the settlement agreement, Joltid and Skype founders Niklas Zennström and Janus Friis will join the investor group, contributing Joltid software and making a significant capital investment in exchange for a 14 percent stake in Skype. As a result, Silver Lake and other investors including Andreessen Horowitz and the Canada Pension Plan Investment Board (CPPIB), will together hold 56 percent of Skype and eBay will retain 30 percent. As previously announced, eBay will receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The deal, which values Skype at $2.75 billion and is expected to close in the fourth quarter of 2009.

I agree with Skype investor and Netscape founder and Ning co-founder Marc Andresen that Skype is one of the most important companies on the Internet.

Now let's see what they can do with this company which has massive potential to keep changing communications and highlighting how IP can disrupt an industry and shake it to its core. One area of exploration will hopefully be deep integration between Ning and Skype allowing the social network building service to leverage real-time communications more effectively. How much stickier will online communities be when participants can see each other and speak immediately. Does a Ning/Skype combination become the largest real-time directory in the world?

Now I really can't wait to hear Skype's Chief Strategy Officer Christopher Dean speak in a few months at ITEXPO in Miami.

Today is a big Twitter day for me. You may or may not realize that my Twitter feed is automated meaning my blog posts just convert over to Twitter posts. I have set up my account to get an email whenever a new person follows me. At a certain point the follows were becoming a distraction so I have a rule which forwards all Twitter follows into a folder which I go through when I have a moment. Today is that day and I will likely look at 50 of them or so.

The reason I look at all my followers is that many of the people following me work for companies which may make for good stories, people to invite to speak at an event, etc.

To me, Twitter is just another channel for my blog to live on - like RSS, Facebook, LinkedIn, etc. I have a number of people who would rather follow me in this manner - and that works for me.

Well, back to my Twitter account.

We are thrilled to announce a slew of top notch keynoters for the upcoming ITEXPO which takes place in Miami, FL Jan 20-22, 2010. I will share them with you by first explaining why they were invited:

A keynote picture from ITEXPO East 2009 in Miami

Open Source

One of the biggest trends in tech this last decade has been open source and while you may not know this, I was a UNIX (the Linux precursor) system admin at TMC back in 1982 or so and I am a big fan of this OS which is reliable, stable and the strong basis for cost-effective solutions in a number of fields. Without a doubt, Asterisk is the major force in the open-source communications space and as such, Digium's CEO Danny Windham (the company behind Asterisk) was the perfect choice to address the audience of businesses, carriers and resellers. By the way, Digium Asterisk World (DAW) is collocated at this show and I hear it just sold out of exhibit spaces and my team is looking for ways to get the waiting list
of companies into an expanded DAW pavilion on the exhibit hall floor.

Digium Asterisk World Photos from ITEXPO East 2009 this year

Google Voice vs. AT&T

Google Voice has been one of the most disruptive influences in telecom these past years and this service has single-handedly become a point of public argument between the search leader and Apple and AT&T - with the FCC acting as referee of sorts. The argument revolves around net neutrality - the concept that carriers will apply discrimination to traffic on their networks based upon traffic, application type or source. Google obviously wants their services to run on any network in an unencumbered fashion while AT&T has said since 1995 when they were SBC that they want to charge for their pipes. AT&T actually then pointed out to the FCC that Google Voice does not terminate all calls on its free Google Voice service meaning it is not adhering to the principles of net neutrality. The reason of course as Google points out is traffic pumping and bizarre intercarrier compensation rules which allow some rural carriers to charge exorbitant rates for calls terminating in their areas. Craig Walker founded Grand Central, the company purchased by Google and the basis for Google Voice and as the Group Product Manager for the Real Time Communications Group at Google, he was a natural person to invite to speak with us at the show. It seems his accomplishments have unleashed a firestorm of controversy which should hopefully clean up some of the ugly mess that is telecom policy and regulation.

Exhibit hall pictures from ITEXPO East 2009 in Miami

HD Voice/SIP and Video

Another major trend in our markets is that of HD voice, video adoption and of course SIP endpoints. AT ITEXPO last year, we had the first panel in the world focusing on HD voice (video) and since then I am excited to see other conference organizers throwing their hat in the HD ring. A major player in all of the above spaces is Polycom and they have done an amazing job of working with disparate vendors on interoperability issues which has moved the market forward by reducing the friction caused by proprietary endpoints. In the world of video, the company has been a major player - developing telepresence systems all the way down to video phones. To get a bead on where this market is heading we invited Polycom Co-Founder, and the CTO of the Voice Communications Group Jeff Rodman to join us as a keynoter.

HD Voice Panel I moderated from ITEXPO East 2009 in Miami

Skype

No matter how you break out the IP communications market, Skype is likely a factor in changing the market in a pro-consumer manner. By giving away global voice calling with quality which far exceeds the PSTN, they have disrupted while getting users used to better voice quality. On top of that, they give away video calling as well, making them a company which excites consumers and scares carriers and anyone else who dares compete with their network of hundreds of millions of subscribers.

Interview I had with Skype's Ian Robin

Skype has been making a major push into the enterprise and is working on enhancing relationships with carriers as well. They are even looking for channel partners who can share in the newly created revenue streams from a number of products like Skye for SIP. When you take all of this into account, it does make great sense to invite Skype Chief Strategy Officer Christopher Dean to speak, doesn't it?

Smartphones, Wireless and Smart Ecosystems

One of the biggest trends in the world of communications is smart devices and ecosystems. What is an ecosystem you ask? Well it is a group of companies who develop products which work with a product or service offered by a host company or companies. The iTunes App Store may be the best example but certainly Avaya's DevConnect or Cisco's Partner Programs are good examples as well. You may know that TMC has focused a tremendous amount of resources on educating the world on smart ecosystems via our new SPEC site. I truly believe ecosystems have a bright future.

In order to bring attendees up to speed on all these topics we invited two top keynoters to present on the matter. Sprint's Mathew Oommen is the vice president of device and technology development at the company and uniquely positioned to share with us his company's view on the future of wireless technology. Oh and by the way, be sure to check out my recent interview with Sprint's Wayne Ward who heads up the company's M2M activities (did I mention there is a collocated M2M conference at ITEXPO?).

To get a handle on wireless devices as they pertain to ecosystems we invited Brian Higgins the Executive Director for Ecosystem Development within Verizon Wireless to join us so we can learn where the company thinks the market is headed. Verizon has been very ambitious in its goal to develop an ecosystem of products and applications which interoperate in the hope of one-upping the iTunes App Store.

We continue to work to add fantastic new speakers to our roster and you can expect this ITEXPO to be the most comprehensive and educational ever and a must-attend. I personally hope to see you there.

Oh and by the way, we have secured great rates this year at the Loews Miami Beach Hotel - you can save $150/night if you book now - the rate is $249 vs. what is typically a $399 rate at prime season. There are many advantages to staying at the show hotel such as networking, etc - and I have always been a fan of the Loews. In fact I was a guest the first day the hotel opened about ten years ago or so.

I just came across an article by Glenn Hall on the TheStreet.com which details outrage at the fact that Verizon charges $350 for their early termination fee - essentially this fee just doubled. His point is that as devices get more and more powerful and device envy increases, we should encourage upgrades. And his point makes good sense.

The challenge for Verizon Wireless is the incredible amount of money they have spent on their network. Having just come back from a trip to Huntsville, Al I can tell you that once again, Verizon proves it has the fastest network and the network which is the most reliable in more places.

I know because I carry a Verizon MiFi device as well as have another Verizon radio embedded into my laptop and I also carry an iPhone. AT&T has a poor network. It is getting better but it is poor and 3G just doesn't exist in many places I travel to. Not so with EVDO from Verizon, it is almost everywhere I go and is almost always blazing fast. Many times it is faster than a local WiFi hotspot which charges $10-$12 per day!

At the end of the day, consumers who want the best network have to pay for it. You can't get something for nothing. The fact that we are able to go into a Verizon store and purchase a $650 phone for $199 and then expect to upgrade it for free a short while later is nuts. Verizon spends billions on its network and I for one want them to continue spending because the productivity of the nation and my company increases in lockstep.

By the way, this leads me to an interesting point you may be interested in, for wireless broadband use, TMC has standardized on Verizon but for devices, we have standardized on the iPhone. One of the things I hear most often when I travel to telecom and tech events is, "If the iPhone was offered on Verizon Wireless, I would get one." The reason of course is the network. Unless you happen to only go to the relatively few places where AT&T has a strong 3G network, you likely would benefit from this great network and again, you can't get something for nothing. One last point -- if you are a Verizon Wireless customer, you want them to continue improving the best network in the US.