Friday, December 22, 2006
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Thursday, December 21, 2006
"In May 2005, the Dutch authorities informed the Commission about the project and then proceeded with the investment in 2006. If Amsterdam’s investment has been made under conditions which a private investor would have accepted, the city's investment would not constitute state aid. Although the Commission has repeatedly requested additional information from the Dutch authorities, they have until now not delivered all the information necessary to assess whether Amsterdam actually acted as a private investor would have."
For those hostile to the project, it's now time to make the lobbyists and spinmeisters get out and earn their Christmas bonuses.
UPDATE: Mega-uber value readers seem to be divided over this one. One writes in to say that it's precisely the effectiveness of the cable lobby's spin machine which has brought this outcome about in the first place. On the other hand, two others have written in to make their case for the glass being half full, noting that today's announcement is not accompanied by any obligation to halt buildout of the network during the investigation. Moreover, they note that the text of the announcement makes explicit that Ms. Kroes does not consider that a muni network funded under MEIP, in the absence of unacceptable state aid, has a distorting effect on the market. This is the positive and more significant message to take away.
UPDATE 2: Vincent Dekker from Trouw, EuroTelcoblog's telecom journalist of the year, has it on the record from Ms. Kroes' own spokesperson that a stop order on the project is not involved here.
A Palladium Club mega-uber value reader did a very skillful screen-grab of Venice (click to enlarge) as it was launching, to capture the list of acknowledgements which appears very, very briefly. There's an interesting list of copyrights here, under the phrase, "parts of this product are": Joltid (okay, we knew that), the Regents of the University of California, OpenSSL Project, Sleepycat Software (I assume it's this), David Beckett (this David Beckett looks like a strong candidate, but I'm not sure), the University of Bristol (twice), Lev Walkin, and Dr. Brian Gladman of Worcester, UK (an encryption and security expert).
UPDATE: Om has a nice piece on Venice here, and I agree with a lot of the things he picks up on. Particularly the social aspects, which is something that the IPTV crowd has been talking about for a long time. Venice seems to have done less talking and more nailing. A couple of days ago, a friend also in the beta started IMing me in Gmail from the Venice client, and even after we finished the chat, I left the IM window open. Thereafter I got an update everytime he started watching a new piece of content. Very cool, and I am looking forward to playing around with Venice more intensively over the holidays.
Wednesday, December 20, 2006
Firstly, and closest to my currently fiber-obsessed heart, I see that Golden Telecom has acquired FTTB specialist Corbina, which currently claims to cover 2.4m households in Moscow and is estimated to take 1/3 of net additions in the local broadband market.
Secondly, I discovered, via the fabulous alarm:clock euro, that Ambient Sound Investments, a heretofore unknown entity to me, but founded by the key engineers behind Skype, has hit the investment trail in earnest. Nice to see part of the proceeds of disruptive innovation being recycled to support even more of the same - and focusing on tapping the potential in Eastern Europe.
Lastly, but by no means leastly, the team at Quintura have launched a version for kids. I think this is really particularly interesting, because while children can obviously use Google, I find that its presentation of results is a bit cumbersome and monotonous, even for kids with good literacy levels (and patience/attention span). How much more interesting would search be for them if they were presented with a cloud of related terms/images? At the crass commercial end of the spectrum, I can see someone like Disney or Viacom wanting to jump all over this concept, but I think it is also an approach which the educational world should probably take a good long look at.
Tuesday, December 19, 2006
UPDATE: Within an hour of posting this, I received my long-expected invitation to the beta. Coincidence, or is somewhat out there reading?
Monday, December 18, 2006
Should NTL be feeling a smug sense of schadenfreude? Based on my recent experience as a customer, I have to say no. On 21st November I cancelled my TV subscription with NTL, in favor of Freeview. Because our broadband service runs off a modem embedded in the set-top box, I would need to have the box taken away and replaced with a modem. The very sensible-sounding customer service person I spoke to offered me an upgrade in speed at half price for three months, and booked the switchover for the earliest possible date under NTL's cancellation policy. This was the Saturday just passed, 16th December, and I was told that the technician would be coming around between 8 AM and 1PM, to swap out the box and set up the modem.
Fastforward to this past Saturday, and (as my UK readers have probably by now anticipated, using their acutely tuned "poor customer service ESP") 1PM came and went without any NTL truck parked outside my house. I then grudgingly called the premium rate "customer care" line, and held on for 20 minutes, listening to a recorded message touting various other NTL services which I would not be receiving. Finally came my turn in the queue, and the beleaguered-sounding customer service person explained that between making the order and the scheduled installation date, NTL had migrated to a new IT system, and our work order had somehow not made the migration. Then he confirmed that all the audit trail leading up to the work order - TV service cancellation, set-top box swap-over, etc, was still on the notes to the account. So, all the necessary data was there, but something failed in the data migration to trigger the truckroll.
Perhaps I should count myself lucky that we have suffered no interruption of service, but I still find it entirely unacceptable that a company can book an appointment three weeks in advance and just not turn up on the day - not only not turn up, but not even be aware that it hadn't turned up - in the process wasting five hours of its customers' time. If I were doing consultancy work, five hours of my time would cost NTL considerably more than one full year of service - yet I end up paying to make a call registering a complaint. And telcos wonder why people are ambivalent towards them...
Friday, December 15, 2006
France Telecom's presentation today contained an early Christmas present for the FTTH enthusiast, not that we should have been surprised, given the pressure coming from Iliad. However, the initial response was perhaps somewhat more subdued than some had expected. I noted at least one "trading sell" recommendation ahead of today's announcement, clearly in expectation of something more radical. With the share price having languished so badly for so long, however, I think it was to be expected that the company would slow-peddle, at least initially, and it seems to have worked (FT closed up 1.7%).
However, the private equity-owned Essent Kabelcom has today received a sizeable lump of coal in its already holey Christmas stocking, as the city of Deventer, right in the heart of Essent country, finds itself the new focus of Dik Wessels' fiber attentions. Mr. Wessels' company Reggefiber has acquired FTTH specialist Y-3Net and plans to spend around EUR50m to connect all 40,000 households in the city. Unlike the Hillegom deployment, this Wessels project is apparently going to be an open network, in accordance with last week's Breedned declaration, which brought together key players in the Dutch market in a rare bit of public consensus. Vincent Dekker at Trouw quotes KPN as saying it might seek to offer services on the Deventer open net, while Essent claims it will take advantage of the open streets to upgrade its network (given its historical ties to Teleste and Ethernet-over-coax, I presume it will pursue something like this). And in the streets of Deventer this evening, the music rings out, "Cable bucks, roasting on an open fire..."
Thursday, December 14, 2006
Tuesday, December 12, 2006
1) The funniest/strangest moment in my career as an analyst: There are a number of strong candidates for this, including the fund manager who kept falling asleep during a presentation which a colleague and I were giving back in 1998 - we ended up taking turns coughing to subtly wake him up, while the other droned on. Or the other client who stared quite blatantly at the legs and cleavage of the saleswoman accompanying us, throughout the duration of the 60-minute presentation. But the winner comes from early 2004. From a historical perspective, it is important to remember that, while we all take Skype for granted as common currency here in late 2006, in early 2004 this was far from the case, despite the level of excitement already being felt among geeks and geek wannabes (including me). With that in mind I would like to stress that, in relating this anecdote, I am not denigrating the response of the investor in question - it was simply a wonderfully surreal sort of moment which deserves to be related. So, early 2004, I'm in Stockholm for a day of meetings with fund managers. The topic is, unsurprisingly, industry disruption, and my presentation has a long section on Skype. I arrived the night before and somehow came down with the flu, so I look and feel like absolute shit. In the first meeting, I work through the first part and move on to Skype. The fund manager says, "Sorry, I'm not familiar with this, what is it?" Being in Sweden, I figure I'll use shorthand. I answer, "Have you ever heard of a Swede named Niklas Zennstrom?" The fund manager perks up. "Yes, I played basketball with him in high school. What's he doing now?"
2) Back in Memphis I was an active musician, involved in a vast number of bands and projects. I started off playing electric guitar and bass, but after my younger brother got a drumkit I became an enthusiastic, if not entirely proficient, drummer. Late in my career I took on the tenor saxophone, playing in a manner most closely resembling a one-lipped Pharoah Sanders. My last sort-of official band, The Grundies, had a habit of rotating instruments, so in the course of a single show (or, as some in the audience referred to it, "an incident") I would play guitar, bass, drums and tenor sax - thankfully not at once. The bands I played/recorded with, in roughly chronological order were: Pseudobop, Kings of the Western Bop, Four Neat Guys, Panther Burns, Shock Opera, Possible Fossils, Harris and the Hepsters, Satan's Bedpan, Linda Heck and the Train Wreck, Hans Faulhaber, Big Mouth Bass, The Brewers, Slaw, Hot Joe, Compulsive Gamblers, Snakehips, Linda Heck and Her Yes Men, Skronkadelic, The Grifters, Bob's Lead Hyena, The Grundies, An All-Gourd Band (yes, all the instruments were made of gourds), and The Bum Notes. I once composed a sort-of three-minute thrash rock opera based on "The Elephant Man," of which I was very proud, though not many have heard it. I had/have a passable singing voice, though I didn't do it publicly very often - usually at paid gigs (weddings/corporate do's) with a jazz combo. I also taught myself to throat sing in a style known as Sygyt, though I don't do that very often these days. My final musical involvement before leaving Memphis was with a group of percussionists, just for fun. One of them was an amazing man named Jack Adcock, who made many of his instruments, including some which were totally original. As it happens, Jack is having surgery today because he is gravely ill with cancer, so even if you don't know him, spare a thought. Godspeed Jack, I love you.
3) Living in Memphis, because of its tremendous musical legacy, it seemed pretty normal to me back then that you should always be only one or two degrees away from greatness. It's only living in Europe that the full wondrousness of that sort of environment really strikes me, as I occasionally am able to tell music fans about the people I met/saw in the course of normal life in Memphis. My first experience with this was as a 12 year-old, not long after my family had moved to Memphis from New Haven, where my dad had done his doctorate. My sixth grade English teacher was named Barbara Jackson, a flamboyant and somewhat scary woman with an amazing collection of mid-1970's pimpette-wear (it was the mid-70's afterall). Her husband occasionally used to come to the school to visit her during breaks, and it was only several years later that I realized the significance of the fact that his first name was Al. I was similarly unaware at the time of the full identity of the person named Alex whom I first met watching TV in my high school girlfriend's living room in 1981, but we crossed paths and played on gigs together many times over the subsequent years. Our family house was about half a mile from the houses of both Sam Phillips, whom I occasionally saw out mowing his front lawn, and Willie Mitchell, and a bit further to the West was the heavily wooded home of the brilliant Charlie Rich, who used to come to the restaurant where I waited tables in college, steadfastly refusing to sign autographs, and politely, but firmly, sending fans away because they were disturbing quality time with his wife. Much later, in my late 20's I regularly used to see Isaac Hayes in a local health food restaurant (this was long before South Park and the Chef renaissance), and for some reason I also seemed to frequently find myself in the same drug store as Rufus Thomas. I also met both Paul Burlison and Roland Janes, perhaps two of the most incendiary guitarists of their era, but when I met them both were languishing in obscurity before once again getting some recognition. I met, and played with on a couple of occasions, the inimitable Cordell Jackson (now there's some Chaotica for you), and she was kind enough to invite me and some friends to her home for the Moon Records 30th anniversary party, where I also met Estelle Axton. One of the bands which I played with included as an occasional member the amazing Robert Palmer, who was incredibly charming. Even in London, I don't seem to be able to avoid the Memphis Mojo. Late last year, my friend Jim Spake came to London with a Stax review, and managed to get me backstage at the Barbican, where I found myself unexpectedly having dinner with Eddie Floyd, William Bell, Skip Pitts (who played the universally recognized wah-wah figure on Theme from Shaft) and Ben Cauley (the only survivor of the Otis Redding plane crash) later meeting Mabel John, and showing a somewhat bemused Booker T. and his wife to the courtesy room.
4) My father went to the same high school as Lee Harvey Oswald, though Oswald was a couple of years behind my dad and they didn't know each other. We have always suspected that Oswald didn't stick around for long (confirmed in this Wikipedia entry), and he apparently missed photo day, because my dad's annual doesn't have his individual photo in it. However, there is one candid group photo taken in a school corridor where he is identified by name, and it is unmistakeably him.
5) My paternal family history is largely a mystery, but it is quite conceivable that I may be related to Johann Franz Encke, which may explain a childhood obsession with astronomy. One connection we are sure of is that I am distantly related (by marriage) to Tex Ritter, which makes me an even more distant relative of John Ritter.
- There is a startling dearth of information with which to assess in any comprehensive way what is actually happening on the internet as it is today, let alone how that changes in a non-NN world. Presenters cited some good work by Caida, CoCombine, and IIJ, but there seemed to be a consensus that we need much more - particularly for regulators to get greater insight into what they are trying, or perhaps not trying, to resolve.
- Definition continues to be the most troublesome aspect, and some questioned if we could actually identify whether there is a problem, or just the prospects of a problem. Conversely, by the time a problem is generally acknowledged, it's often too late to resolve satisfactorily. Others questioned whether the issue will be amplified to serve individual political ambitions in Brussels, resulting in a pre-emptive over-reaction. I'd love to be more specific about all this, but rules are rules.
- It seemed that there was a consensus that the EU Audiovisual Media Services Directive is fraught with potential problems.
My talk (slides here, and Torrent version) centered around two themes. The first was that, one year on from the infamous "My Pipes" interview, the world is a lot more complicated. Whereas the MPAA probably once (mistakenly) wanted Bram Cohen's head on a pike, its members are now signing up for BitTorrent distribution, and there are other platforms which seek to use the protocol to empower independent content creators and established names alike. World of Warcraft uses BT for client updates, and woe betide any carrier which stands between a guild member and his virtual world. As I've discussed before, the BBC also employs Kontiki in services like this one, which it makes clear is funded by the TV license fee - I don't know how many people would feel strongly enough about it to kick up a fuss, but it seems to me that throttling such a service could be seen as depriving license payers of the full use and value of their license. Okay, that's probably a stretch, but it illustrates the point that protocols previously classified as "alien," "pernicious," or downright "evil" may now be supporting perfectly legal services which consumers and authors have paid for/invested in. Ham-fisted attempts at "traffic shaping" now risk angering not only consumers, but also media companies with big legal departments, so choose your enemies wisely. I attempted to make the same point around the mash-up culture, citing examples like AIM Pages, which is now up to 239 application modules, some of which are from "mortal enemies" in the web space, as well as Second Life, which I think could end up being a minefield for a "My Pipes" implementation.
My second point was that I think the entire debate has only come about as a result of the yawning gap between the pace of innovation in applications and the pace of deployment of true broadband. In other words, the disease is our approach to infrastructure, and the Net Neutrality debate is a symptom - I seemed to be the only person to delve into this aspect, though it's possible that someone did in an earlier session. While I stopped short of proposing any specific solutions, I did try to convey the idea that we need to seriously question whether the current model is capable of delivering true broadband, because there are some serious structural issues which seem to be inconsistent with the goal, which I listed as follows:
–Vertically integrated business models
–Addicted to scarcity
–Primary focus on capital markets/investors
–Poor track record in innovation
–Maximum investment horizon 3 – 5 years
This last issue, investment horizon and the audience likely to be interested, is a crucial one. I closed by predicting/proposing that there will soon be a re-examination of the infrastructure funding model, involving all or some of the following in some no doubt interesting combinations:
–Entrepreneurial capital, thinking outside the box (cf., Iliad)
–Specialist infrastructure funds
–Municipal/regional governments/development agencies (Amsterdam, Cataluña, Loma Linda CA, Seattle, Singapore, UTOPIA)
–Incumbent telcos, pending a change in DNA
Wednesday, December 06, 2006
As a bit of background, I can't help thinking back to the OFCOM meeting last week, where Arun Sarin was asked about the threat from mobile VoIP, and responded by saying that the cellular world is going to flat rate pricing, which limits the appeal of VoIP - end of story. That sort of thinking is rooted in the "VoIP as price arbitrage" mindset, and frankly I think a lot of people have moved on from that now. Packetmobile seems to be another validation of this shift.
The proposition here includes VoIP, of course, but I think the value to the end user is really built around group context and presence. There is some very clever stuff going on here around user location, motion and velocity, handset status, network connection, and signal strength - all of which remove a lot of the frustrating lack of transparency inherent in mobile services currently.
From the operator's perspective, these same features also open up a lot of possibilities for revenue streams which have very little to do with voice itself. The client has the added advantage of being very small and bearer-agnostic, and that goes down as far as GPRS - so let's not sneeze at the voice angle either. There is also an intriguing social stealth marketing potential here, wherein a user on a Packetmobile-powered service can invite an off-net user to download a Java midlet, so they can share presence information and IM, the operator opportunity being, "Like what you see? Churn to us and enjoy the full service." What I expect operators might like most is that Packetmobile has positioned itself as an enabler/managed services partner, with no aspirations of creating a presence in the consumer space - i.e., the spec and branding are controlled by the carrier.
It's going to be very interesting to see what sort of interest this combination of elements generates from carriers desperately in need of differentiation, particularly in the wake of 3's wake-up call to the mobile world.
"explore opportunities to provide further services such as Google's VoIP (voice over internet protocol) telephony services, enhanced storage and future product developments,"
"explore future forms of web, TV and mobile advertising."
If you expect, as I do, that Sky is eventually poised to do something disruptive in wireless, then this last little piece is even more intriguing. Stay tuned.
On an entirely separate, but I think related note, the Consume list points me towards a nice Google map mash-up of hotspots, many of them community initiatives, in the UK, and also to the Boundless mesh network in Greenwich.
As one example near and dear to my heart, I keep thinking about the brokers' research community and its enduring addiction to scattergun pdf distribution and voicemail bombardment of clients - how different might things be if the reader/readers were able to opt in to just this sort of virtual meeting room to discuss and debate? Pull, not push, share, not thrust.
Tuesday, December 05, 2006
P.S. - that's right, not a single telco on the list, despite margins and cash flows most industries would kill for. And to make matters worse, the beleaguered savers have to call a premium rate phone number to find out just how badly they're going to get screwed.
Monday, December 04, 2006
When I say significant, we're talking about ARPU rising from EUR23 to EUR83 over the next five years, which looks, um, challenging to say the least (though Multikabel has come up with some interesting strategies on "yield management," formerly called bait and switch). The Ministry is apparently concerned not only about price hikes, but also about the negative impact this would have on any plans which the investors might have for network upgrades. In turn, if the affected cable networks, accounting for more than 50% of all cable homes in the Netherlands, were to dramatically cut back on investment, it is feared that KPN would also feel less motivation to push forward its investment in FTTN.
I assume the Ministry must be concerned that the Netherlands' position in the upper echelon of the OECD broadband league table will be eroded as a result, particularly as the focus in the next phase of broadband development moves toward quality and depth rather than quantity and breadth, in my view. This situation once again seems to underline the tension, and perhaps fundamental inconsistency, between long-term infrastructure planning and the short term (2 - 5 year) investment horizons of the capital markets, both public and private.
Friday, December 01, 2006
I was impressed with James Murdoch's performance, which is not to say that I agreed with his message. However, he conveyed more substance and thoughtfulness in this venue than normally comes across in the typical earnings release presentations. I'm going to be bold and predict that a) we won't see him as CEO of Sky for more than another two years, before he takes over either Fox Interactive or the entire Mother Ship; and b) I wouldn't be surprised to see him pursue a political career.
Overall, these CEO/executive presentations collectively formed a sort of public lobbying exercise aimed at OFCOM and the EU, not that we should have been surprised by this: Sky - the PSB and BBC funding formulae need to be rethought, the BBC has megalomaniac aspirations outside of its remit; Vodafone - retail roaming regulation has no legal foundation and 900MHz refarming needs to be addressed before 3G extension bands are auctioned; Hutchison 3 - refarming should include an appraisal of redistribution of 900MHz frequencies; Carphone Warehouse - transparency and process in LLU needs to improve; NTL - some action should be taken over a certain someone's monopolistic behavior in sports and film rights; Google - some action on copyright release for indexation of printed and archival material would be nice (this is entirely out of OFCOM's sphere of influence, it must be said); Channel 4 - continuity in the PSB funding formula is essential to ensure a consistent output of quality indigenous content. All fairly predictable messages, but there were some interesting stops along the way. Charles Dunstone came across as fairly humble (humbled?) and made some very sensible statements about the telcos' necessity to understand their place in the value chain or risk alienating customers. Arun Sarin, in response to questions from 3 about equity in refarming, said he assumed some transaction might take place before that which might make the whole thing unnecessary, which got a lot of laughs.
I was intrigued by some sections of the session featuring Fabio Colasanti, DG Info Soc, because my human antennae told me that his body language suggested he wasn't entirely in accordance with the company line on Television Without Frontiers, or whatever unthreatening name it has taken on now. If you ever get the YouTube video to download, you can see for yourself.
Thanks again to the OFCOM folks for inviting me along, and to the Mayor for letting us have drinks at the roof of Thunderdome (inside it's a spiral, but that's a subject for another day).