The best is yet to come

Or something like that. Happy New Year from EuroTelcoblog. See you in 2011, and yes, that includes you, persistent comment spammers!

All I want for Christmas is...

After two years, I have now left the mCAPITAL project. I wish the team success with their imminent launch.

As for next steps, I have a number of irons in a number of fires, but I am also a big believer in crowd-sourcing, so if you, dear reader, have any suggestions, opportunities or propositions in mind, I am very happy to listen.

Happy Holidays from EuroTelcoblog

BT Infinity, to the 'hood and beyond!

While walking around my neighborhood in the past couple of days, I've seen signs that the good people of Greater Dulwich are heading for Infinity. The first I noticed is on Townley Road, along the fence surrounding Alleyn's School. No doubt the local kids will find the added bandwidth advantageous in videoconference interviews for those precious places at Oxbridge. Future members of the elite should not suffer undue latency.



The second is on Upland Road, just a few meters up the road from my humble hovel, and only about 500 meters from the local BT exchange. Still, I can practically reach out the window and touch the Virgin Media cabinet I am connected to, so I see no incentive to consider switching, at least until it is real FTTH. By which time, no doubt, I will be in a nursing home.



So the next time you're passing through SE22, you might just catch sight of a mysterious white horse wandering inexplicably through shafts of light cascading from the heavens, as people of all ages, classes and races smile approvingly. Surely this is the biggest buzz since currency decimilization, or the introduction of the banana.

Absence of Persuasive Incentive

As I monitored the intermittent tweetstream from the Telco 2.0 event earlier this month in London, one exchange between attendees caught my eye. One tweeter posited, "Are telcos still mainly driven by fear?" to which another responded, "Gone beyond fear - into risk avoidance because of job insecurity." I initially thought about writing this post upon reading this exchange, but got bogged down with other projects. Then a couple of weeks later Benoit Felten suggested he was generally on the same wavelength, and this prompted further reflection.

I, and a great many others, have pilloried or mocked the industry over the years for what seem to be inherent and persistent cultural or structural inhibitors to innovation. At times I have questioned whether it was even worth the effort for telcos to try to innovate on the services front (as I stated in point nine here), given my view that their true source of cash generation is infrastructure, with their retail units merely another end customer (albeit typically the largest) for their genuinely profitable wholesale services.

Contrary to impressions some may have, based on bland conference presentations, telcos are actually populated and managed by human beings, and what I have lamentably failed to consider over the years is the influence of the basic element of human self-interest in defining their behavior. In other words, what incentives do the people inside telcos and their shareholders actually have to promote change? I'm coming to the conclusion that in this question lies the key to the issue - while pretty much everyone I know in the industry would acknowledge a need to promote change and innovation for its long-term health, there stands in the way a problematic "telco API" (Absence of Persuasive Incentive), which leads to inertia. And viewed through the lens of human self-interest, I think this is an entirely reasonable reaction.

Consider, for example, the lack of alignment between radical thinking and investor conservatism. Investors on the whole view incumbent telcos in mature markets as reliable sources of cash, like utility businesses. As an extreme example, France Telecom's dividend yield is currently 8.7%, and having just pledged to maintain the dividend at the current level of EUR1.40 for three years (from which the French government stands to collect EUR1bn per year), it is hard to see the company backing away from this. So as, say, a pension fund portfolio manager, you have a company with a reliable dividend yield higher than some of the yields on offer in the "high yield" bond space at the moment, theoretically with lower risk, so why wouldn't you want to own it? And why would you encourage the management to do something which might put that at risk, particularly if you have limited confidence in them to actually execute it? So you urge them to just keep doing what they do, better, with fewer people, and to hand over any excess cash to you, because you can invest it more efficiently than they can. I think this is a fair representation of the general attitude of institutional investors, like it or not, and I can't find many flaws with this argument on the whole, taking their position into account. They have a fiduciary duty to allocate capital among different sectors, and if they see what they regard as reckless or irrational behavior in one sector, they will put money elsewhere. So from their perspective, "If it ain't broke, don't try to fix it." That doesn't mean they don't acknowledge the longer term risks to the industry, but they are charged with protecting people's pension money in the near term and adapting to change longer term, so when they see an industry capable of pumping out this much cash for now through maintaining the status quo, they will hardly demand change which increases risk.

Even if there were a consensus from shareholders of a need for urgent action, some of the projects involved would no doubt require continuity of management over the long term (e.g., a truly committed FTTH strategy is at least a 10-year project in countries of any significant size). Contrast this with the reality among telcos - data from the US in 2009 shows that C-level IT execs in telecom have the shortest life-span of any industry, at 4.7 years, and my experience with Europe suggests the same is true here. Think about the incumbents you know, and count how many people in senior positions in 2002/3 are still there now (indeed, in 2004 the telco CEO lifespan was four years). Just thinking of the companies I have covered in my career, I would put the average tenure at under five years, and in many cases more like three. So if you're one of these people, under pressure to stabilize cash flows and satisfy your shareholders, just from the standpoint of human self-interest, what incentive do you have to promote radical change, the effects of which you know you will never be around to see or be rewarded for? If you have four years to make an impact, and a choice between investing in an emerging segment with perhaps undefined revenue opportunities (M2M, cloud, smart grid) and an OSS/BSS overhaul which you are fairly confident will lower costs against a flat/declining revenue line, I think I can guess which choice you will make. Play the game, pull down that bonus, and work on your post-exit strategy.

So the executive suite has a revolving door, the organizational chart is written in pencil, corporate governance guidelines ensure short tenures for board members, and investors on the whole don't want to derail the gravy train in the short term as they regularly reassess the long-term prospects. Arguably none of the key stakeholders is truly incentivized to look beyond the five-year time frame, perhaps with the exception of the rank-and-file employees who hope to retire with a pension, and the pension trustees themselves.

I had lunch recently with a very bright friend who has done a lot of work on the publishing industry and its attempts to get to grips with reinvention in a crater-scarred landscape of paywalls, e-readers, iPads, and smartphone apps. His platinum comment was along the lines of, "The discussion about transformation only got serious once managements were confronted with having to sack 70% of the newsroom." By which time, presumably, it is very late in the day. However, for a "beleaguered" telecom industry wherein a company like France Telecom can generate enough cash to commit to a EUR3.7bn dividend for the next three years while still having flexibility to invest in infrastructure and engage in M&A, that day still looks very far off indeed.

I, for one, feel as though my error has been in wanting too much from the telco, expecting it to react to a long-term threat with a quantum leap, when in fact, I now see, it has limited incentive to acknowledge or address anything more than a need for cautious incremental change and adaptation. I will cut it some slack in future. After all, it's only human.

The reports of my death have been greatly exaggerated

Turn off your mind, relax, and float downstream to the good old, bad old days. October 4, 2006 - day one of the first-ever Telco 2.0 event. I was honored with the opening presentation, as "analyst in residence" for day one. In the presentations which followed, Abdul Guefor from Intel Capital further piled on the agony, highlighting some of the cultural and structural issues which hamstrung telco transformation, and warning, "If you don't address these issues, Private Equity will." An icy sense of dread enveloped the room, and the already-battered audience shook its collective head in pained recognition of the inevitable. And we were still at least an hour from the first coffee break.

"Private Equity" - two words which could inspire fear in the most self-assured telco management teams in 2006. The elephant in the room, wielding in its well-fed trunk a Sword of Damocles over the head of an industry still in therapy from the near-death experiences of the tech implosion. Anything was possible, nothing was unthinkable, even the unthinkable.

And the unthinkable continued a few months longer, until the credit market began to seize up, and the inevitable populist backlash began. Previously feared and respected, PE was now vilified, pilloried, and dragged before Parliament to explain itself. Schadenfreude gushed forth as access to LBO financing ran dry. The dreaded PE juggernaut found itself neutered, and the angry masses danced in the streets.

Well, not exactly, and not for long. As the quaintly named "credit crunch" (God, I cannot hate this phrase enough) intensified into a bona fide financial crisis, evil, greedy PE was replaced in the stocks by investment banks, financial regulators, hedge funds and politicians, to be taunted by village idiots and the swelling ranks of those who had miraculously become experts on financial markets overnight (and who, of course, had never fudged a self-cert mortgage or exploited equity release to buy a nicer car).

The perceived atrocities of PE were downgraded to misdemeanors, and the world moved on. With no access to finance, they could do no more harm, and anyway, their over-leveraged investments, apparently justified on champagne-and-Ferrari-fume-fuelled delusional assumptions of recurring access to refinancing, were doomed in this new era.

Well, that was the consensus view, but it's interesting to take note of a few recent developments in the telco space which suggest that the consensus was, once again, wrong. To be sure, there have been a few situations where things have gone spectacularly wrong. But there are a number of situations where things appear to have gone much better than anyone would have ever expected, particularly given the macro headwinds.

For example, German cable, an industry strewn with the corpses of investors who previously tried to improve competitiveness, has come of age and produced returns for PE sponsors. BC Partners and Apollo built a great business in Unitymedia, and were well down the road to an IPO when they opted instead to sell to Mr. Malone for 7.7x LQA EBITDA. The other German cable behemoth, Kabel Deutschland (KDG, an early 2006 secondary LBO by Providence Equity, which bought out partners Apax and Goldman Sachs) this year has successfully pushed out maturities on debt, defied market jitters by getting an IPO away, followed with a secondary private placement, and just this week, asked senior lenders to give the company greater flexibility in refinancing debt and paying dividends to shareholders. The last point is crucial - as the company approaches its target leverage levels, the sponsors want the flexibility to refinance more expensive junior tranches of debt and take cash out of the business in dividends, on the basis that the capital structure of the business will be self-sustaining. In summary, the PE sponsors have generated nearly EUR1.2bn in gross proceeds this year from sales of shares, and are now opening the door to a future dividend stream. I don't know what it's like to be a KDG customer or employee, but as an outside observer, this looks to me like pretty much the way LBOs are meant to work out. The sponsors have seen a partial exit, and minority shareholders are pretty well aligned with the sponsors' interests. The stock is up 50% since the March IPO (most of that since August), while Deutsche Telekom has managed only a 3.9% gain. I can think of far worse outcomes.

Or take Dutch cable company Ziggo, an early 2006 LBO by Warburg Pincus and Cinven, which many (yours included) dismissed at the time, given the 7.5x leverage the business was carrying. This year the company has joined the refinancing frenzy, placing EUR1.2bn in senior notes in April, at an 8.125% yield, and then returning in October for a EUR500m offering of senior secured notes, which was upsized to EUR750m due to demand, and priced at a cheeky 6.125% yield. Net leverage was down to 4.7x in the September quarter, so not entirely out of the woods yet, but very close to the level of debt UPC carries today as a matter of policy, with no adverse effects. The business itself continues to perform well, so presumably the next major milestone is an IPO, as the sponsors have now been in the asset for nearly five years.

Or how about TDC, still the largest incumbent telco to ever have been the subject of an LBO, and a flashpoint for criticism as well as various predictions of failure? I will hold up my hand and say that Denmark, one of the toughest markets in Europe, would not have been my first choice of target markets in 2005, and I was one of many who expected the company to have its lunch eaten by the rise of FTTH deployments by local utilities. Well, it's the job of the incumbent to play the long game, and TDC did this by allowing the challenger to fail, picking up assets in the process. The sponsors also commenced the dismantling of TDC's international mini-empire, which developed during the era when Ameritech controlled the company. Proceeds from this process are to be applied to further de-leveraging the company, which is apparently on the runway for IPO, and eventually a return to the ranks of investment-grade companies. I wish there were some Danish proverb I could quote about a vulture giving birth to a phoenix, but I don't expect it exists, and my Danish is very poor in any event.

Or what about beleaguered Spanish cable company ONO? Here is a company which every member of the distressed investing and restructuring community in Europe fully expected to end up in a debt restructuring in late 2009 or sometime in 2010. Of course, however, debt restructurings mean lending banks take write-offs/haircuts and end up owning assets they don't want to have to actively manage, like Spanish cable companies. So ultimately, ONO managed to pull off a forward start agreement with lenders, returning to the market to refinance in October with a EUR500m senior secured offering, which was up-sized to EUR700m (do you see a pattern here?), and priced inside 9%. That's one helluva comeback for a company which in mid-2009 saw its CDS trading in line with that of WIND Hellas - revealing similar expectations at the time for two companies which have subsequently seen very different outcomes. Apparently ONO's chairman was quoted by Expansion last week as saying the company would look to IPO when market conditions permit.

Hell, we've even seen the return of the dividend deal, which gives everyone in the credit market an uneasy sense of deja vu, but apparently not enough to keep them from joining in. Asian undersea cable operator and data center hopeful Pacnet last week closed a $300m senior secured bond offering priced at par with a 9.125% coupon. $100m of the proceeds are earmarked for a dividend to shareholders Ashmore, Spinnaker and Clearwater, typically something which bond investors frown on, but I understand that the deal was 2x covered at mid-week, with demand from Asia alone covering 80% of the announced deal size. Eventually it ended up 5x oversubscribed. And this is for a single-B-rated company (albeit a good one, I think) in a sector where investors have a large store of really terrible memories.

These are but a few examples of how things have gone right so far for PE investments in our beloved telco space, and I am not making any value judgements here about the PE industry, its tactics, or its ethics. It is full of smart people, and intelligence is a large part of survival, but in this case, I think it has also gotten lucky. "Lucky" in the sense that the popularity of the high yield market seems to have attracted a significant participation from non-traditional participants, many of whom will need to put money to work and are more interested in income than they are worried about short-term market risk or the yield compression in new deals which many of the rest of us have found so disturbing this year. In other words, there is a wall of money which seems to chase any deal which comes to market, and if you're a PE sponsor looking to refinance, it's a nice problem to have people queueing up to hand you money, sometimes even more than you asked for in the first place.

While I don't expect a return to the Golden Age of the telco mega-LBO any time soon, if ever, it does seem that finance is available for the right types of assets, and I expect PE to continue to be more visibly active. For one thing, as the examples highlighted above suggest, the 2006/7 era deals are moving into their fourth or fifth year, and the sponsors must surely be feeling pressure to generate liquidity events of some sort, or at least to put the building blocks in place. It's also important to recall that some of the funds raised in 2006 and 2007 are still nowhere near being fully invested, so there must also be mounting pressure to put money to work in new deals. Nor is it the case that inflows to the space have totally stopped since, though the climate is obviously more challenging.

So where should we expect new activity to come from? I think there may be three broad categories:

1) I think it may be of fairly limited impact in the telco space, but the trend towards secondary buy-outs (welcome to the FT paywall) may turn up some deals, as companies increasingly look to deploy older vintage capital;

2) Deals driven by a desire to augment the value of existing portfolio companies, one example being Silverlake's presence in the Skype acquisition, which has given rise to a partnership with legacy investment Avaya. Trying to predict where and why these occur will take careful analysis of existing PE/venture portfolios and a detailed matrix of good matches;

3) New deals, with a focus on strategic enablers, not the "big game" network LBOs of the past. I was intrigued by the two deals Carlyle announced last week, the acquisitions of CommScope and Syniverse. The former is a key infrastructure solutions provider to some interesting subsegments including wireless, fiber, cable, and data centers, while the latter is a key enabler of mobile roaming services and datamining for telcos. Maybe I'm reading too much into these deals, but it looks to me as if, rather than following the playbook of buying up network assets and sweating them, Carlyle seems to be working from an industry matrix which points it towards companies active in defensible strategic choke points. Which is an approach I like.

So welcome back Private Equity, you make life more interesting and keep us common folk on our toes!

And now a word from our sponsor

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Low Tescosterone

I've been seeing this ad on TV for the past few days, and I thought I'd share it with mega-uber value readers everywhere. In case you aren't acquainted with it, Tesco is a highly successful UK-based chain of supermarkets/superstores, with operations in many other countries. For some, the company represents a vampire squid on the face of UK retailing, and to others, a textbook example of masterful site acquisition and marketing genius (Tesco's ground-breaking loyalty card/data-mining approach can now be found in many walks of life in the UK, and is almost as prevalent as CCTV!).

Love them or hate them, they are typically very good at what they do, and one thing they have been doing for over five years now is running an MVNO in the UK. The network now has 2.3m subs, and is branching, with some success, into the contract segment from an historical pre-pay focus. So, with that background, here the company takes good-humored aim at the inflated egos on display among telcos when it comes to branding and brand extension. (This is particularly interesting/ironic as Tesco's long-standing CEO, Sir Terry Leahy, succeeded mentor Lord MacLaurin, who was chairman of Vodafone during its period of frenzied international expansion and global re-branding of local subsidiaries.)

Anyway, it's all good fun, but with a relevant and fairly obvious point which must be a source of discomfort for UK telcos. The Tesco customer regularly interacts with physical manifestations of the Tesco brand and its values: its stores, its staff, its carparks. Tesco is literally something the customer can get his teeth into, and while in the carefully-structured cocoon of its stores, Tesco can get under the skin of the customer - guiding, manipulating, gaming, and, yes, rewarding. In contrast, the telco customer experience of an operator's brand is almost an entirely abstract and barren affair, most tangibly measured in the relative indifference/ineptness of call center staff. No wonder there is an almost desperate sense of need evident in the branding/sponsorship activities of telcos.

Not for our beloved Tesco Mobile. No such self-esteem problem or delusions of grandeur in evidence here. Just rewards for customers via the "real world" brand, delivered with appreciation - a virtuous circle reinforced. Masterful. It will be a warm day in December before we see BT Group or Virgin Media rewarding customers with Christmas turkeys, though in this time of austerity, that might be just the strategy which would resonate. Members of the Dumb Pipe Taliban Gospel Choir, chime in, "Leave the retailing to the retailers."

Git your st00pid on

Catching up on some long overdue blog-reading, I stumbled across David Beckemeyer's interesting post of September 25. I tried using his own redirect link, as well as bit.ly, to post a link to Facebook, but both times I was greeted with the following error message:

"This message contains blocked content that has previously been flagged as abusive or spammy."

I'm hardly surprised that Facebook considers openbook to be abusive, given that openbook is simply using a Facebook API to reveal the portion of its user base which has failed to activate security properly. Then again, given some of the fantastically low I.Q.'s on display (type in the drug reference, racist hate speech, or sexual buzzword of your choice, and watch the st00pid flow), one could also argue that this group of users constitutes a special needs group who should be given assistance (preferably in txt spch, innit) to tweak their settings.

No matter how you slice it, it ain't pretty, and I am most disturbed, though not surprised, to see that Facebook seems to probe and index even shortened URLs embedded in status posts before they are even posted. I'm sure Mr. Z would argue that he's trying to protect us from ourselves, and while I'm pretty good at that on my own, it seems clear that many FB users are incapable of, or uninterested in, really protecting themselves. I assume law enforcement, potential employers, and the intelligence services of a number of less-enlightened countries take a keen interest in the effluent revealed here. The next test comes in a moment, when, after I publish here, I attempt to post this link to my own FB page. Let's see how far the probing extends...

UPDATE: I was able to post a link to this to my wall, so it would seem that there is no sophisticated indexing of the target page going on here, given that the post contains two separate links to openbook. Still, I'm curious to see how the situation evolves over time. I'm probably being paranoid, but, as the old adage states, "Just because you're paranoid, it doesn't mean that Facebook is not out to get you."

Here's one for folk who can't do maths

Where on earth would you store them all?

All aboard!

Just a moment ago I tried to view the NetRoadshow presentation in support of ONO's senior secured bond issue using Chrome, my browser of choice, and received this message:

Browser Alert

In order to view NetRoadshow presentations, you must use one of the following browser versions on a Windows operating system:

Microsoft Internet Explorer 5.0 or higher, or
Mozilla Firefox 1.0 or higher
Netscape Navigator 7.1 or higher

Please try logging in again with one of the browsers listed above. If you are in a corporate environment and don't have one of these browsers, please contact your IT support staff for assistance.

There's a cluetrain leaving in 15 minutes, guys, and you ought to get on it...

Down to earth

You may have seen this on Lindsey Annison's fine blog, but I like the simplicity of this video by rural fiber pioneer Chris Doyle.

What does your smartphone say behind your back?

I stumbled across this interesting link in the NANOG list traffic, and thought I would share it. The folks behind the pcapr project have developed a tool to analyze which smartphone apps are saying what to whom. The instructions here are not for those of low geek quotient, and sadly it's a Mac-only tool at present, but I expect we might see some interesting analysis coming out of this if enough people take part and share their results.

Resurfacing

I'll skip my normal apology for not posting recently, but you might want to consult this site for some very fine examples from others. No doubt somewhere therein lie elements true to my own recent experience, though I can confirm that I have definitely not been working on a Queen musical.

Life is complex and challenging, 'nuff said.

So, to return to EuroTelcoblog topics of interest, a friend on the Fiberevolution list points to this blockbuster news out of The Netherlands. Essentially, two large public pension funds in the country are combining to launch a new EUR1bn fund with the purpose of consolidating and expanding existing fiber/FTTH networks over the next ten years, in a project that may ultimately end up as a EUR10bn ticket. The new fund, Communications Infrastructure Fund (CIF), will also invest in wireless towers, which is entirely sensible given that the fiber network will provide the most robust backhaul available in the country.

I've been wondering for some time when we might see this kind of fund emerge, so it is a welcome development, and should put some genuine financial firepower behind the development of open access networks, at least in countries where the financial resources still exist to fund them. In my view, this structure better aligns the financial return profiles of the investors with the durations of the projects. Pension funds by definition have to plan for stable returns over the next 50 years; telcos and MSOs are enslaved to the 3 - 5 year time horizons demanded by shareholders, often coinciding roughly with the lifespan of management teams...

A cry for help

Well, it's not an actual cry for help (yet), but I thought that might get your attention...

I'm currently involved in a research project, the intention of which is to collect and analyze technical data around fiber deployments (FTTH/B/C/N/letter of your choice), with a view to benchmarking deployment costs against the technology choices and physical constraints of real-world projects. If you're involved, or have been involved, in a real-world fiber project, and are willing and able to share some detailed data on an anonymized basis, please ping me, and I can fill you in on the project in more detail.

Facebook creates orphans

Now there's a headline The Daily Mail would probably love to run one day, though it would almost certainly be followed by something along the lines of "... and is out to nick jobs from hard-working British families!" I, however, am talking about orphan data.

The other day, my elder daughter was updating her Facebook info, and in her musical likes kindly included an old (and occasionally still active) band of mine, Linda Heck & The Train Wreck. When I noticed she had done this, I was genuinely moved, and thanked her, but the pedantic parent in me felt obliged to point out that she had failed to capitalize "The Train Wreck." She went to the computer and attempted to correct this in her profile, but Facebook would not allow it, which made me suspect that there was some sort of static content being pointed to, somewhere. So we clicked on her link, and sure enough, it led to a page dedicated to "Linda Heck & the train wreck," with my daughter listed as the only person who liked it. In other words, by merely typing the name, a page was created, with no consent on her part.

So we conducted an experiment. I asked her to re-type the band name, but this time with proper capitalization and an exclamation mark at the end, i.e., "Linda Heck & The Train Wreck!" As she was the only person who liked the previous page, the old page was wiped and replaced with this new one. Since then, a number of people have liked it, so presumably it is permanent now, unless we all decide to unlike it, which might be another interesting experiment. Looking at similar pages which have been created around other bands, it appears that Facebook scrapes Wikipedia pages (where available), friends' comments containing key words, and "global posts" (i.e., posts by people you don't know, and who don't know you) in an attempt to auto-generate something like a relevant page.

Just for the sake of mischief, I repeated the process, but this time replacing the exclamation mark with a question mark, which has now created a new page. We could create a huge number of other pages on the same band (or anything else), using various mis-spellings, odd punctuation, l33t, etc., so that the potential for data fragmentation around this single band becomes almost infinite.

I find this simultaneously pointless and insidious. It is clear that Facebook wants to be smarter than its users, in trying to auto-populate pages without anyone consciously constructing them, or more importantly, controlling them. For a major band, this may not be such a huge issue, as the legal department can always be called in and the "official" page invoked, but my friend and collaborator, Linda Heck, is now inadvertently confronted with a page (two, actually) dedicated to an old band of hers over which she has no control or ability to edit.

As it stands, the only way for her (or anyone) to build any meaningful content into this page is to write a Wikipedia entry on the band, which would then be incorporated once Facebook crawled the site. Alternatively, she or someone else could make Facebook posts about the band, but these would have to include the exclamation point to be picked up. This seems an ass-backward way to build a community of interest, if that is the goal.

The other thing which I find disconcerting goes back to the tired old oxymoronic concept of "Facebook privacy." The "global posts" include contributions from people who probably believe that they have kept their data private. As long as they are posting something along the lines of "Wow, this Kinks video is awesome!" that may not be an issue, but what if their post consists of "Dude, remember this song from that Kinks show where we took mushrooms and crashed your dad's car on the way home?" Forget that career in law enforcement.

As with many of the recent revelations about Facebook, this is needlessly annoying and disconcerting. It seems to me that at the very least, creation of a new page should be an opt-in event. The absurdist in me tends to think that the only suitable response is to flood Facebook with fictitious and pointless data, which we can all collude to share and propagate. Some would argue that this goal was accomplished long ago. Otherwise, I guess we all should just keep our likes to ourselves, which isn't very social, is it?

Put the iPhone down, and step away from the Kool Aid dispenser

I have a tremendous amount of respect for Apple and all it has achieved in design and market creation, as well as the precipitous rise in its market cap, which The Dear Leader recently described as "surreal." I have never encountered a CEO of any company who didn't believe (at least in public) that his/her company was undervalued, so this remark in itself is surreal and has a vague whiff of short-bait about it.

Another thing I find increasingly surreal is how, every time Mr. Jobs speaks, otherwise intelligent people seem to suffer a rapid onset of cerebral paralysis. Last night, as I watched the euphoric Twitsteria flowing from the Jobstown compound, I saw a couple of comments along the lines of "Two deaf people signing to each other over the iPhone - Apple just leapfrogged everyone," and (my favorite), "Future - we are here."

The last time I checked, the future started about eight years ago. Here's a TV spot from the technologically ambitious, but commercially inept, 3 UK, from spring 2003. Video calling. It ain't pretty, and the brain-dead, bloke-ish inanity of it completely deflates the potential magic of the proposition, but there it is.

3 Mobile Video Calli..
Watch the ad...

So, in theory, we've had this capability in Europe for the better part of a decade. I consider myself to be a keen observer of how real people use devices and interact with communications services, and I have *_NEVER_* seen anyone making a video call on a mobile handset out in the real world, ever. The far-from-overwhelming HTC Touch HD handset I got two years ago had a front-facing camera for video calling. I never used it, not even out of curiosity, because a) I knew it would suck and be very expensive over a 3G connection, and b) if I were using WiFi and desired a video chat with someone, I could use Skype on my netbook, which I almost always have with me. It is interesting that the highly impressive HTC Desire I now own has no front-facing camera, so it would appear that this is a feature which the Church of Android considers to be superfluous, at least for now.

However, Apple has an impressive track record when it comes to creating new markets and changing consumer behavior, so just because there is no demonstrable history of use cases for mobile video calling so far, doesn't mean that we can blithely assume this won't change. Perhaps the fact that Apple is limiting the service to WiFi for now, and the characteristic attention that the company gives to usability and elegance of interface, will drive adoption and protect it from the risk of disappointing consumer expectations. Then again, in my experience, the Apple faithful typically own more than one Apple product, so if they are in a place with WiFi coverage, there is a decent chance that they will have a MacBook or iPad in tow as well, either of which would offer a superior experience if video calling were required. As far as I can tell, FaceTime video calling works only between iPhone 4 devices (for now, though I expect that will change over time), so this could also be problematic for adoption depending on contract periods and upgrade cycles among one's iPhone social circle.

Don't get me wrong - the iPhone is an awesome device, and the promise of a (probably) satisfactory video calling experience over it is a nice-to-have feature. It's just that tired old telecom "pundits" like me have heard the George Jetson mobile video calling pitch for so long now, that when I hear people talking about "leap-frogging" and "living in the future," I feel tempted to call out the deprogrammers. I would like nothing more than for FaceTime to prove me wrong, but I just can't see it happening very quickly.

Now, if you'll excuse me, I've got to go wash my flying car.

Note to self

Make sure that you post the appropriate content to the appropriate blog in future.

The vast majority of you probably don't care about my sporadic musical activities. So, my heartfelt apologies go out to you. The other day I erroneously posted an account of my recent musical adventures to this blog. I realized my gaffe within seconds and removed the post, but RSS is an unforgiving medium, so it was immortalized, despite my best efforts. Onward and upward.

Diverted

Probably no posts for the next few days, as I'm Memphis-bound. Hopefully I will have some interesting news to report upon my return.

Fiberfete, via coax

Having had my travel plans b(j)orked by the land of fire and ice, last night I tuned into the webcast of the opening session of Fiberfete. You can do the same today here, from 08:30 CDT (14:30 UK/15:30 CET/00:30 HK).

I have to confess that it was bittersweet when the conference kicked off at precisely the moment that UK airspace was reopened, apparently due to a reassessment of jet engine resilience (UK Transport Chaos Minister Lord Adonis this morning made the curious claim that tolerance levels are now 10x what they were previously, but "previously" was a zero tolerance regime as far as I know - this is obviously some New Labour Math beyond my grasp). Or was it really because of the bold move taken by Wee Willie Walsh, or the spectre of a general election? Alas, I digress.

I was really thrilled to see this event come to fruition, and I was very pleased to see that comrade Benoit Felten actually eventually made it Stateside to represent the largely stranded European contingent, though he sadly missed his speaking slot. I assume he will be tweeting day two of the event, as will I.

I was also pleased to see the attendees being accompanied into the conference room by the sound of a swinging jazz quartet (twin fiddles - this is Southern Louisiana afterall - upright bass and guitar) playing "Honeysuckle Rose." It's good to be grounded in the past as a point of departure in considering the future (and the futuristic), so what better than analogue 20th Century music?

This was a theme which continued in David Isenberg's fascinating panel session with City Mayor Joey Durel, Director of Lafayette Utilities System Terry Huval, and Jim Baller. In a refreshing departure from the usual geek focus of fiber discussions, the panel took as its point of departure the historical and cultural aspects of Lafayette which made the development of its fiber network at least likely, if not inevitable, echoing some of the opening remarks which preceded the panel.

The short version is that Lafayette has always been a community of outsiders and mavericks. Mayor Durel pointed out that the first four ethnic groups to settle in the area were all refugees displaced from their previous homes, and this had created early on a tendency towards self-reliance. When electrification began in the late 1890s, no commercial entity viewed Lafayette as worthy of investment, so the city fathers took it upon themselves to make it happen. The utility they created eventually took the strategic and operational decision in the late 1990s to deploy fiber for internal use, but then realized that the cost differential of expanding their deployment from 12 fiber strands to 96 was only 20%, and that the extra capacity would open up option value to be captured at some future date.

That future date is pretty much now, not only in the retail space, but also in the collateral benefits starting to be delivered to the local university and research community, the creative/interactive community, and other knowledge-based enterprises. The founding fathers of the city, who took the decision to self-provision electricity, could not possibly have envisaged how that decision has subsequently developed, but neither is this an accident of history.

Yes, the groundwork was there to build on, but the city's progress to date has been a product of a recognition of common interest between the city government, commerce, educational institutions, and grass roots activists. As Mayor Durel pointed out, one of his motivations as a newly-elected mayor to back the fiber vision was "to keep our kids here," in other words to stem out-migration by the younger generation to places which might offer more obvious opportunities for economic advancement. Such a phenomenon has been the cause of premature death for more than one community.

As a candidate receiving donations from BellSouth during the campaign, this was a bold move, and the city spent more than $4m in legal, consulting and associated fees in defending itself from legal challenges by both the incumbent and cable. Ironically, the more strident the opposition from the duopoly, the greater community awareness became, and at some point, this tipped over into a popular resentment of "outsiders" trying to dictate to the residents what was in their best interest. Mayor Durel stated, "The legal fees were the greatest marketing dollars we ever spent."

My feeling as the first day ended was that this discussion highlighted something which is almost universally overlooked at fiber events, in favor of discussions of technical and topological discussions: what ultimately may dictate success or failure is the local community, its values, history, political development and institutions. All the connectivity in the world will not bring affluence and entrepreneurial vigor to an environment where the cards are stacked against it, or where institutional fragmentation and apathy are overwhelming. (I am reminded here again of my unsettling discussion over lunch with some Japanese telecom consultants three years ago. I was singing the praises of Japan's "fiber miracle" and found my hosts exchanging embarrassed smiles. "The only driver we can see for fiber adoption is cheap voice." I left the exchange thinking that Japan might not necessarily be culturally or institutionally equipped to see an explosion of innovation and entrepreneurship simply because fiber is everywhere - a sobering realization to a Fiber Taliban member, as I then was.)

Lafayette has had some obvious advantages by virtue of its history, character, and institutions. These won't be replicable everywhere, but that doesn't guarantee failure for others or rule out alternative approaches elsewhere. Nor does it mean that success is automatic for the relatively advantaged. The key, from what I can tell so far, admittedly as an outsider stranded in London, is that the community had the vision and motivation to capitalise on its advantages, to develop a plan and execute it.

And it seems that, having gotten this far, they are still in the learning and exploration phase when it comes to exactly where this goes from here, but having taken the decision to invest, they now at least have the opportunity to define and influence what option value is created in future - which puts them decades ahead of where I currently sit.

I found the first day to be inspiring and thought-provoking, and while it might sound strange, I am genuinely looking forward to the 9.5 hour webcast today. Special thanks and honorary mention to Lane Fournerat, who fulfilled my wish for multiple points of view/value-added extras by live-streaming the tour of the LITE facility on qik. I believe/hope he may be doing the same today, so check him out.

Lastly, and apologies for closing on a downer, but if I have to name and shame anyone, it's telco professionals around the world. On yesterday's webcast, the highest number of viewers I saw was 27. Yes, twenty-seven. Here we have one of the most interesting case studies I have ever come across, and an event full of collective wisdom and experience which is truly stunning (and free for the taking), and fewer than 30 people, of whom I know at least five, can be bothered to tune in. Bizarre.

Summary soundbite: it's not just fiber of the optical kind, but the fiber of the community and its institutions, which will separate the winners and losers.

B(j)orked

I was hugely looking forward to taking part in Fiberfete, where I was due to do some sponsored coverage of the event, but Eyjafjallajökull had other ideas, and my flight this morning was cancelled. The earliest slot I could re-book for was Friday morning, by which time the whole event will be over. David Isenberg has tried in vain for years to get me to one event or another, and on this one the stars aligned beautifully, before dispersing catastrophically.

I will of course enjoy following the event via webcast, but for me the real promise was to meet (in some cases for the first time) others with whom I have been in virtual contact for many years, and of course, to share ideas and experiences. I'm sure there are a lot of other frustrated attendees (also of eComm) who share my sense of disappointment.

I guess if there's any positive spin to this, it's that you probably couldn't find a better illustration of the potential value of fiber than the unprecedented travel chaos we're experiencing in Europe. A single-angle webcast video feed is one way to experience an event which you are unable to attend, but it's a pretty anaemic representation - passive, one-dimensional and unidirectional. With telepresence, virtual collaboration spaces, augmented reality tools, and the ability to toggle between multiple conference tracks and/or points of view, we would be talking about quite a different prospect altogether. As Blondie sang, "Dreaming is free."

Anyway, to all my erstwhile Fiberfete comrades, have a great conference, and have some gumbo for me. Also, if you're attending and have any insights, anecdotes, or other color from the event, please get in touch.

(P.S., I will be giving some coverage to the event via the webcast, both here and on Twitter, where you can follow the backchannel with the hashtag #fiberfete. eComm is also well worth following, if you are capable of multitasking.)

Washed away

While much of the rest of the world has been preoccupied with the sickening spectacle of tech bloggers publicly making love to their iPads, or alternatively dissecting them in search of a bone of St. Peter or some other indication of divine significance, here in the UK we have been witnessing the humiliating travesty of the Digital Economy Bill being pushed through the soon-to-be-dissolved Parliament in a process called "wash-up," which conceptually is perhaps most similar to a drug dealer hastily flushing his gear down a toilet when the jig is up. However, in this case the effluent is poorly drafted legislation, and it will probably have a much more toxic legacy than a bit of waterlogged skag flushed into the Thames.

The bill can be read here, and I'm not going to go through it (mainly because it makes my blood pressure rise to dangerous levels), but eminent cyber-lawyer Lilian Edwards has given a lot of very good coverage to the "process," all of it well-observed, and some of it very impassioned. Apart from the sheer embarrassment of the process itself, a largely anti-democratic shambles with just over 6% of MPs turning up for a crucial second-reading debate, we also had to endure a lot of poorly-informed rhetoric from those who did show. One commenter on Twitter referred to the debate as being like a group of nursery school children discussing quantum mechanics, though there were also some rare examples of well-informed and rational argument against excessive haste and unforeseen consequences.

Mike Butcher has posted a fairly scathing piece, and the Ars Technica coverage is also a good intro for readers outside the UK, where the issue seems to have attracted surprisingly little attention up to now. The TechCrunch piece raises an issue I have been writing about for a long time, namely the fact that a DPI-led arms race initiated by the content industry might have unintended consequences, which will further muddy the waters of legal due process. As one observer on the NANOG list noted succinctly in the wake of the announcement of the Comcast ruling (coming in the same week - can you hear the slapping of high-fives in content land?), "Looks like a good time to get into VPN services."

There is a lot to be disturbed about in this bill, but I am most unsettled about what is, to my mind, a fairly arbitrary and vague stance on what might constitute evidence to substantiate suspicion of involvement in copyright infringement. (If anyone has a clearer idea, please contact me and let me know what I am missing.) This can only be exacerbated by a widespread adoption of encryption, as I envisaged in my post linked above, and which Mike Butcher cites a real-world example of in Sweden. In such a scenario, will it be enough to observe volumes of encrypted traffic flows to infer potential infringement? From a technical standpoint, maybe, but from a legal standpoint this sounds a lot like the "if you have nothing to hide, there is nothing to fear" mantra so often employed by totalitarian regimes. My guess is that if we do see a spike in adoption of such services in the UK, it may be precisely because people have nothing to hide and thus resent being snooped on, something which has always gone on, but which they may now be more sensitized to as a result of this asinine legislation.

One huge problem in all of this, and one which the blinkered supporters of this bill seem to be blissfully ignorant of, is that many of the same tools which they associate with "piracy" (if, indeed their understanding even extends to the word "tools") are also in "legitimate" use by those in the creative industries, whom the proponents of this bill expressly claim to protect. Twitter prankster @record_industry perhaps nailed the real intent of the phrase "creative industries" with this tweet: "To clarify: when the bill says 'protect artists,' we mean REAL artists. Not you shitty amateur ones." I suspect there is more truth in this than politicians would like to admit. Nevertheless, I fear that there is a huge number of "creatives" who rely on the internet for their livelihood who might find themselves on the wrong end of the enforcement regime suggested by this bill.

Here's a personal case in point. My friend and sometimes band mate, Linda Heck, is working on a recording project in Memphis and Nashville. She very kindly asked me to contribute guitar and vocals to four tracks on the project. My friend and neighbor, Paul, has a studio in his home in South London, which he has previously used only to record his own band, and I decided to record my parts there. As it happens, I am going to the States in two weeks' time, so I will hand-deliver the discs containing my contributions. However, Paul and I could just as easily have ended up uploading the files to a secure FTP site, from which Linda and her producer could have then downloaded across the Atlantic.

Now, these files are WAV audio files, uncompressed, so a single guitar part for a single song can be 15 - 50MB, and there are a lot of them. Just for my contribution to four songs, the total payload came in at over 600MB, so roughly equivalent to 10 albums in mp3 format, or perhaps a feature-length film in standard or sub-standard resolution. Hypothetically, let's say that Paul becomes popular as a producer, and ends up getting involved in several other similar projects, wherein several times a week he is uploading and downloading several gigabytes of media files to a secure FTP site. Well, to those connected with the project, it's just an ordinary part of the production process, but to a telco acting under duress as secret policeman of "content kleptomaniacs," it will probably be flagged as suspicious activity. And to the paranoid, intellectually bereft elements of the content industry which endorse these Orwellian tactics as a diversion from their glaring lack of imagination, it will almost certainly be enough for poor Paul to end up on a blacklist of some sort. After all, what possible reason could someone have for uploading big content files to a secure FTP site besides infringement? It couldn't be independent music, it must be episodes of "Glee."

This is only one example, but one I fear may end up being a textbook case in future if this idiocy is allowed to continue. I also know a lot of other "Pauls" in video production, photography, software and other industries where shipping and receiving large amounts of sensitive, proprietary data, often in encrypted form, from a home broadband connection to secure online storage is a normal and essential part of business. Without highly invasive inspection of the actual files (think strip-search) to show that they are not infringing, the industry may simply assume that volume of this sort, either encrypted or to/from secure sites, or both, is suspicious at least, and deserving of escalation through the "process." (Not to mention users, including me, of services like Jungle Disk.)

Perhaps I'm wrong. Maybe the Crusaders Against Content Kleptomania (CACK) will develop a rational, scientific and defensible approach which won't throw up false positives on spurious evidence, and impose costs and economic damage on innocent individuals - "creatives" even. I hope so, but I don't find history to be encouraging, and I think it's embarrassingly clear that most of the politicians involved with this shit-show don't have a clue of what they might be unleashing. Anytime you wield a sledgehammer to crack a nut, you risk smashing someone's fingers in the process, possibly your own.

Not your average Guy

I was saddened to hear today of the passing of Guy Kewney. I didn't really know him - we ran into each other at conferences over the years and had brief chats, and he called me occasionally with bits of gossip or to ask for a quote or input on a story. He was, however, a big influence, in the sense that he was one of the first European tech journalists I read online whom I actually found informative and entertaining. I have always had a lot of affection for him because he was among the first to link to this humble bloglet in its early days and raise the possibility that some of what I had to say might have been worthwhile. And, though he was most unhappy with the event, he also inadvertently provided one of the most ludicrously embarrassing moments in the history of the BBC, just by being who he was (or wasn't). Those who knew his work will remember him for so much more. Thanks, Guy, and rest in peace.

Lock the door, innit

Here's an excerpt from an email I received from Virgin Media today. Just for the record, my new account set-up, installation, and service so far has been nothing short of smooth, painless and splendid, a vast improvement over the way things were five years ago. My only suggestion for improvement comes after the email excerpt.

Hi James Enck,

Welcome to Virgin Media! It's great to have you with us, and we hope you're already enjoying getting stuck in to your new services.

At Virgin Media, we want to make sure we give you the best customer service out there. That's why we'd really like to find out how things went for you when you joined us.

We've put together a few quick questions about joining us, and we'd really appreciate it if you'd take the time to let us know your thoughts. It shouldn't take longer than around two or three minutes to complete.

By finding out exactly how things went for you, we'll be able to understand the things we're getting right, and if there's anything you'd like us to do better. And we promise to use your feedback to make improvements where we can.

Okay, Virgin Media. I haven't been "getting stuck in to" your services, because that's too much commitment for me, and I don't want to answer your questionnaire, because life's too short. As I said earlier, ordering online, installation, and the service itself have all been perfect, and I have absolutely no complaints, apart from the three week lag time, but I guess you can't help it if you're popular, as you alone can offer an incredibly sexy average download speed in excess of 3Mbps. My one, and only, concern is that the street cabinet right outside my house is open, and has apparently been open since time immemorial, judging from the crude stone implements and charcoal drawings I recently discovered inside. The engineer who did my installation one week ago claimed to have locked it, but it is now open again, flapping in the unseasonably cold wind. Luckily, the locals seem to be too stupid or distracted to concern themselves with the obvious opportunity for vandalism/mischief, but the Theory of Evolution suggests that they may turn their sights to it eventually. The clock is ticking.

Swing low

What can you expect by way of "special treats" when you're an employee in a company which has been LBO'd more times than anyone can remember and suffered a tough couple of years in one of the worst macroeconomic situations in the developed world? Well, if that company is eircom, you should brace yourself for the worst. Evidence suggests that the company was recently "treated" to a performance by the execrable Crystal Swing (check out this charming hit, an affectionate tribute to "funny foreign people"). Here's a short video clip of the kids doing "The Hucklebuck" (a rip off of Charlie Parker's "Now's the Time") in front of the eircom logo, and here's a blurry photo of CEO Paul Donovan getting down with "the yoof." This looks like a good candidate for runner-up as worst corporate entertainment ever, after the obvious hands-down winner, the Bank of America/MBNA merger hoedown.

Fiber mania - let's get ready to rumble

There's an old saying to the effect that every revolutionary change goes through three phases: universal dismissal, grudging acceptance, and finally adoption as an unquestionable and indispensable fact of daily life. I remember once asking at a conference for a show of hands of Skype users, and seeing only 10% or so raised. Now it is everywhere, established as a verb, alluded to on "The Archers", used by mainstream news media.

Around the same time as that conference, in early 2004, I started writing (dip in around page 60) about the inevitability of fiber, and the politicization of true broadband as a lever of socio-economic development policy, as well as the limited scope for the associated benefits to be captured within the narrow envelope of telco "shareholder value."

As with my earlier work on Skype, I think my sales team thought I was wandering off down some trivial, theoretical blind alley, or worse, just talking science fiction crap. I stuck to my guns. I'm mainly stating this to avoid any possible misinterpretation as a "trend-rider" by those not acquainted with my background.

Given all this background, I must say that it's hugely satisfying, and entirely unsurprising, to see the current mania surrounding fiber, and particularly the lengths some people will go to get a piece of the fiber future. As a former Memphian, I am proud of the relatively more down-to-earth and dignified appeals being made for the Memphis case for inclusion in the Google project. I will be pulling for you, Memphibians.

On the subject, I am looking forward mightily to participating in Fiberfete, in sunny Louisiana in three weeks' time. It should be a good opportunity to reignite my fiber enthusiasm.

Have you ever been experienced?

Well, I have. And I'm not even talking life experience here. That would be a much longer post. I'm thinking here of user experience, on which one always overdoses when moving into a new house, which I have just done. Countless calls to customer service centers for thankless exchanges, invariably with people possessing either unintelligible accents or preposterous speech impediments. It's all part of the fun. Today I tried to inform an insurance company of my change of address, only to be told that it had to be done in writing. "How about email?" I optimistically asked. "Sorry sir, it has to be in writing, on paper." I pointed out that if I sent them an email and they printed it out, it would be in writing, on paper. I think you can guess how that little exchange ended. I just got back from posting the letter.

Anyway, on to the telecom-related angle here. I signed up to Virgin Media on the day I moved in, using their online registration site, which I must confess was amazingly smooth and well-designed. Nine out of ten so far. Installation date was estimated at the time at 19th March, i.e., 15 days after placing the order. I then got an email (and courtesy call) a couple of days later to tell me that my installation would take place on the 24th, or 20 days after placing the order. I know that Virgin's "fibre optic" service is blazingly, blindingly, orgasmically fantastic, and I was a satisfied customer previously, but can they really be seeing such astonishing demand that it takes three weeks? And why an estimated average install time of two hours? There is an existing cable drop and phone line in the flat, so it should be a simple case of plugging in the modem and router, job done. My guess is that their databases may not be all that hot, or maybe they're allowing for extra clean-up time after their invariably techno-blaring vans run over some poor cyclist, as nearly happened to me recently. Oh, and while the tech is on site, I might ask him to look at the street cabinet just in front of the house, which is, predictably, open for all the world to see.

So, in the meantime, I am using a "mobile broadband" (/irony) dongle from Orange. The house sits at the top of a hill, so reception is great throughout the house at all times, though it is a bit flaky with what seems like a lot of latency on the uplink. Anyway, it works fine for what it is, but I got curious about data usage and went on the Orange site to look at my account. I have both a handset and a dongle, so two separate SIM cards, and I was pleased to see that for the handset, I am able to get near-realtime updates on data usage. Stupidly, I expected to be able to do the same with the dongle, but no cigar. For some unknown reason, Orange doesn't log this in any way that anyone can see, not even their own call center staff (believe me, I have asked them). The usage only becomes visible if the dongle goes over its 3GB limit, at which time overage charges (I have been quoted everything from 5p to 15p per MB, all from the same call center, clearly on Tyneside, though the actual charge is 2p, confirmed) kick in.

The first person I spoke to in the call center erroneously told me that the overage charge for data was GBP3 per MB, which alarmed me, which is the only reason I became interested in this issue in the first place. I was also told that, as my first generation dongle doesn't have a built-in data meter, I should download one. So, I downloaded NetMeter, which seems to yield erroneous readings (for example, when I plug my handset into the laptop to charge it, it registers a download of 50MB or thereabouts, which is plainly absurd).

Apart from the obvious training issues in the billing help section, I am baffled as to why Orange meters usage on one product in a granular way which is helpful to the user, while having a complete lack of visibility on the other, despite the fact that both are just SIM cards connected to radios on a common billing system. On a fourth call to the company to clarify what is going on, my agent kindly offered me an additional 2GB free for the next three months, in recognition of the confusion and misinformation I had been fed. It also slipped out that overage charges are capped at GBP30 - 40, depending on the contract, no matter how much overage, and they won't shut the user down, at least not on the first offence. The things you learn when you call the Orange call center four times on the same subject...

So, last stop on my rant is the Facebook IM function. It astounds me that a company which has built itself up so impressively by understanding (and arguably, transforming) the way people connect and communicate, can apparently be so complacently satisfied with this primitive POS. Recently, I have missed a number of attempts by friends and family to chat, because I was either in a different browser tab and didn't notice the pathetic text-flash in the Facebook tab, or I had the sound turned down so that I couldn't hear the single impotent little "pop" that accompanies a new message. The Facebook clan, if they thought about it at all, probably thought they were clever in making the chat notification unobtrusive, but there was a reason that rotary phones had a loud metal bell inside, so why ignore the lessons of history?

Gee, this blogging thing is fun. I may have to try more of it sometime soon. I could even start a disaffected consumer blog. Too bad that Hank Williams has already taken the most appropriate blog title ever for that sort of thing - "Why Does Everything Suck?"

Socially inept social marketing

As enablers of communications, I don't think it's too much to expect of communications companies to be able to communicate. However, it seems to be almost an alien concept, and when it goes wrong, their efforts can smack of ineptitude, if not outright desperation. A friend received the following from a PR agency, which shall remain nameless to save them embarrassment, though I don't know why I'm being so charitable:

Hi there,

We work for BT and would like to offer you the opportunity to trial the new BT Infinity Superfast Broadband. The service is being rolled out across the UK over the coming months and as a prominent xxx blogger, we'll like your influence to help tell people about it. Here’s the deal – we’ll give you FREEbroadband in exchange for running a competition about BT Infinity on your blog.

BT Infinity is basically a fibre optic broadband service that allows download speeds up to 40MB and upload speeds of up to 10MB so you'll be able to do so much more at the same time - and in an instant.

Here’s some more info on BT Infinity: http://www.productsandservices.bt.com/consumerProducts/displayTopic.do?topicId=29017

Sound a good deal? Just let us know if it's something you'd be interest taking part and we’ll arrange for full installation and send you a media pack about the competition details right away!

Please let us know.

Best wishes

So it looks like said PR shop is scatter gun spamming bloggers in a cack handed effort to tap some illusory "social buzz" surrounding BT Infinity (interesting name choice, by the way - you can't go beyond infinity, now defined as 40/10Mbps). No personal salutation, so not particularly social, and in line two my friend is described as a "prominent xxx blogger." Triple X? Really? I'm also baffled as to exactly what sort of "competition about BT Infinity" he is meant to "run" on his blog. Perhaps some sort of xxx download speed contest?

Bizarre from start to finish, and it's reminiscent of the kind of anonymous nonsense I occasionally receive from Sani Abacha's widow. Socially inept, and, methinks, highly unlikely to inspire a warm and fuzzy feeling in any "prominent xxx blogger," but fantastic comedic value. So here comes the punchline: the "prominent xxx blogger" recipient mothballed his blog quite some time ago, just so you know.

BT, if you are intent on doing social marketing, I am available to advise you.

Digital Dales Colloquium Number 1

In direct contravention of my own new year's resolution, I have not, in fact, posted more frequently, which is a source of ongoing embarrassment to me. Life has brought many changes over the past six months, and most of them have not been great. I've been trying to focus my energy on things which have a more positive direct impact on my life, or on issues I care about, and less on things like pontificating about the iPad (though if I did want to pontificate on it, I would probably take a different tack).

For this reason, I would really love to be at the Digital Dales Colloquium Number 1, next Friday the 26th of February, but unfortunately, I am moving house that day. I had the pleasure of finally meeting Lindsey Annison recently, and her enthusiasm and commitment to getting true connectivity to people who need and will benefit from it is truly inspiring. It probably helps that she has experienced life on the broadband margins personally - as she said to me, try running a business out of your home with a DSL line that delivers 256kbps, on a good day.

Anyway, try to get there if you can, because I'm sure it's going to be a great event. Sorry I have to take a rain check.

Googlebit to the home

Here I am in Amsterdam spending the day with people involved in the FTTH open network space, and lo and behold, the big G weighs in with a helpful bit of ammo to throw at the asymmetric services Taliban.

"We want to see what developers and users can do with ultra high-speeds, whether it's creating new bandwidth-intensive "killer apps" and services, or other uses we can't yet imagine."

The emphasis on the last bit is mine, and for obvious reasons. This is something which we were trying to stress here, in drawing a parallel with the decision to extend the power grid to all. That decision wasn't taken with perfect knowledge of what the benefits or ripple effects would be, and I suspect we have no greater insight into where developments like this will lead.

But rest assured that, with Google now wading in, telco paranoia readings will rise to DEFCON 1, which should provide great comedy value for months to come. Just when I thought broadband was getting dull...

A blaze of glory

Firstly, I'd like to wish a belated Happy New Year to all mega-uber value readers. I've started the year with a few distractions, and so haven't been as assiduous in my resolution to post more in 2010, but there's still a lot of the year left.

I've previously sung the praises of Virgin Media's top-notch treasury team, and once again they've shown what they're made of. On Monday the company announced a £500m offering of senior secured notes, following on from the senior facilities amendment process of last year, which allowed the company to issue bonds ranking pari passu with existing bank debt, in order to manage maturities. This in itself was not surprising, but demand was such that the company was able to up-size the transaction to raise a jaw-dropping three times what it initially aimed for. The two tranches (7% sterling and 6.5% dollar) priced at 98.5, to yield 7.25% and 6.75%, respectively, and traded up on the break, but appear to be struggling somewhat now.

This development tells us that there is an eye-watering level of liquidity looking for a home, though I am puzzled as to why, in the face of rising interest rates in the future, it chose this issue and this sort of pricing to get excited about. More interesting to me is what this deal says about Virgin Media's expectations for the capital markets in the near term. Most of the new issues we have seen in recent months (including Virgin's own issues) which have been up-sized have typically been increased by 50%, or in extreme cases, to maybe double the initial expectations. But three times? Audacious stuff indeed, though completely understandable if investors are trampling one another to hand you money on favorable terms.

Thinking back to the dark days of Q4 2008, when everyone seemed to think the world was going to end, Virgin Media was among the first in Europe to take a proactive stance towards managing its maturity profile, itself a bold move against a backdrop of widespread scepticism and despair, and it continued to manage the process throughout the following year, tapping the market in May, July and November. In doing so, it would appear that the company correctly read the course that the market would take as the mood lightened and risk appetite returned, and it was opportunistic in taking advantage of the dynamic.

With this latest gargantuan issue, however, I feel an element of "last gasp," and I am wondering if we should take a negative view of what this says about the company's reading of the market in 2010, i.e., the door is closing so take the money and run. If that's what they're saying, I'm prepared to listen.

Now ONO, which has endured far more stress and waited far longer to deal with its own issues, is going to attempt broadly the same solution, albeit in a much more compressed fashion. I will be very interested to see how it fares in comparison.