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.

Happy holidays, farewell noughties, and onward and upward in 2010

Well, as Santa packs his sleigh, one thing is painfully clear: I have been a bad blogger and will only be receiving lumps of coal this year. My New Year's resolution is to post and Tweet more frequently in 2010. It promises to be an interesting, if challenging, new decade, and I look forward to being involved in new projects and adventures.

Given that the past two years have brought me little besides serial frustrations and disappointments on both personal and professional fronts, I can't say that I am sad to see the end of this first decade of the millennium. However, that would be to overlook all the wondrous developments in our beloved telecom which make the world in December 2009 look almost unrecognisable to the time traveller from ten years ago: the inexorable global rise of mobile; ubiquitous WiFi; grid computing; Linux in the consumer sphere; the proliferation of consumer broadband; peer-to-peer architectures; social media, user-generated content, and mash-ups; online gaming and immersive worlds; access-independent voice; the iPhone and apps; the iPlayer/Hulu; YouTube; the Cloud phenomenon; Google Earth; search and recommendation engines which actually work...

I could go on, and no doubt I'm missing many and overselling others. However, those of you who remember 2000 will, if you're honest, recognize that this list represents some genuinely huge changes to the world we inhabited when we celebrated the Millennium, and also that many of them were unexpected, or have happened either faster or on a broader scale than many could have anticipated at the time. Yet, what underlies their development is the technical, regulatory, and commercial framework which allowed these developments to take shape. In other words, the investment in development, policy, infrastructure and business models which enabled the fairly humble and primitive platform quaintly called "The Information Superhighway" in 1999 was critical to engendering all of the innovation we have seen in the decade since.

Only the most visionary at the time could have had a genuinely clear idea of how things would look in 2009, but the steps were taken nevertheless, possibly in some cases as a blind stab in the dark at some sort of nebulous opportunity which might develop as a result. We now find ourselves at the threshold of a new decade and a new range of unforeseen possibilities to be facilitated through further investment, and my guess is that the degree of transformation we will acknowledge at this time in 2019 may make the past decade look tame by comparison. If you find this line of thinking interesting, and also find yourself overdosing on family togetherness over the holidays, you might like to sneak away into a quiet corner and have a read of this recently-published paper which I co-wrote with my man Taylor Reynolds of the OECD. I look forward to your feedback, and hopefully to discussing and debating in the new year. Meanwhile, I am off to the States to see family and friends and (gulp) play a live show...

Until then, thanks for reading, and I'd like to wish you all the best during the holidays and a fulfilling and prosperous new year.

Of sausage and budgets

There's an old saying to the effect that there are two things you never want to see being made: UK budgets and Vienna sausage. Yesterday, most eyes in the UK were on the renaming of the City of London as Darlingrad, a brave new world wherein the conventional laws of mathematics don't apply, e.g., a 50% tax on an estimated GBP6bn bonus pool raises only GBP500m.

Meanwhile, another debacle was occurring somewhat further east, as Telekom Austria yesterday issued a tersely-worded recalibration of market expectations for 2010, wherein, despite revenue outlook being in line with consensus, EBITDA was forecast to be 11% below consensus, capex 14% higher, and as a result, operating free cash flow 25% lower. No additional color was offered by way of explanation for the variance, and the market understandably did a 14% tap dance on the share price.

Some friends of mine on the sell-side had a few hours before unfortunately published a buy note on the company. It is common practice for analysts to run their forecasts and note past a company prior to publication, just to ensure there are no factual errors or misrepresentations. Whether that occurred in this case or not, I don't know, but I assume it did, and if so, the fact that the company was on the verge of publishing material information and said nothing is not the sort of thing which endears companies to analysts.

In fact, in this case, the analysts in question, rather than trying to explain things away and goose their numbers to fit their recommendation, have done the right thing, and terminated coverage. They write:

"We spoke with TA after its profit warning yesterday. In sum we understand the following: A few months ago it was quite clear that the four year budget drawn in late 2008 would have to be revised down. But TA goes through the detailed process of drawing up a four year budget only once every 12 months (at the end of each calendar year) - yesterday's announcement follows the conclusion of this process for 2009.

From this we deduce that until this detailed process is completed, TA is largely unable to correct/reset consensus expectations even if trading conditions look set to be very different from the assumptions behind the last communicated business plan (in this case, the one drawn up in late 2008).

We apologise unreservedly for not thinking that this was at all possible. Because clearly it is possible, we believe that we cannot research TA's investment case with any reasonable degree of confidence. We therefore terminate coverage."

This is hard stuff to have to write when you're in their position, and if anything, I think they're being overly polite. I am of the humble opinion that if companies become aware of a material change to outlook over the coming 12 months (I consider EBITDA variation of 11% to be material), there is every incentive (and indeed, in some markets, a regulatory requirement) to issue a formal statement and get the pain over with in a way which preserves some degree of trust and respect from the analyst and investor base. Such a move would also avoid having to surface revelations such as the fact that the four year budget is reviewed once a year, three weeks before Christmas. Investors don't want nasty short-term shocks, but they also don't want persistent nagging suspicions that there is a culture of complacency in such a rapidly changing industry landscape, or more frankly, that visibility is too poor to make credible four-year budgets.

Walk like an Egyptian

A little over a month ago, I had an interesting discussion with someone involved in the subordinated debt of WIND Hellas. This is a situation I have followed very closely all year, though I was only interested in the senior parts of the capital structure, for reasons which are now obvious, principally because I have always expected the outcome we have recently seen.

As I explained to them, my thesis was pretty straightforward. The company's capital structure was over-leveraged, and the EBITDA multiple of the company through the senior debt alone was in some cases at a premium to European incumbents, despite having a critical liquidity crisis, compromised competitive position, and Greek macro risk. The implication was that the subordinated debt had little if any value, and Mr. Sawiris' original EUR500m equity check was lying at the bottom of the Aegean. The only way to salvage any equity value would be to align interests with the senior lenders and push out the guys in the middle - the subordinated debt holders. No room for concessions or niceties.

Their response was that they couldn't understand why Mr. Sawiris would risk his reputation and access to capital markets through a UK pre-pack insolvency which would wipe out EUR960m and $275m of subordinated debt. Surely he wouldn't be able to come back to the markets any time soon. I told them I wasn't convinced that he need be too worried about either reputation or access - a lot of cash is waiting on the sidelines, and the market has a chronically short memory.

Sure enough, less than a month since the filing, a sister entity from the Weather complex, Wind Acquisition Holdings Finance SA, comes to market with a EUR500m bond offering. Not only is it serious money, it is also reportedly structured as a PIK note for the first four years. We haven't seen any PIK issues since things started to go south in 2007, and many of the outstanding PIK deals from the Good Old Days have been treated like red-headed stepchildren over the past year. So, having just crushed a boatload of subordinated debt in November, we're now looking at a large, deeply subordinated debt issue which is effectively free money for the first four years. Far from being locked out of the markets, Mr. Sawiris will defiantly get this one away, and I am now prepared to officially elevate him to rock legend status. You may not agree with his tactics, but he certainly gets an A+ for audacity.

Surely investors angered by the WIND Hellas outcome would be inclined to boycott, but I hear price talk of a 12% coupon, and the market is so relentlessly thirsty for yield that I'm pretty confident that when the books close it will either be significantly up-sized or very oversubscribed. I don't know the Egyptian gesture equating to the two-fingered salute, but this will probably do nicely.

Happy Thanksgiving

A very happy holiday to all the turkey gobblers across the pond. Here in Britain we are thankful for our universal right to untrammelled internet access, er, d'oh!

A little more conversation...

I find it equally amusing and depressing when I hear telcos speak, as they frequently do, about the secret to value creation being in their content strategy. For shareholders, perhaps that's true (I'm deeply skeptical), but for customers and society at large, clearly the greatest value created in communications is in enabling interactions and transactions, or as my friends at Telco 2.0 frame it, "removing friction."

So here's some friction. This morning I took my daughters to school, to find the headmaster and several other members of staff standing at the school gates holding hastily printed signs which read, "Unfortunately, we have to cancel school for all of year 1 and class 9 due to health and safety reasons." From what we could gather, there was a flood overnight, affecting classrooms in one section of the building.

Luckily, (or unluckily, they might say) neither of my daughters was in the affected groups. However, there are around 100 kids who were, and the first notice their parents received of this less-than-minor inconvenience was when they arrived at the school shortly before 9:00. Some of these kids don't live all that close to the school, so their families will have made unnecessary car or bike journeys, while others will have had contend with no childcare backup and unsympathetic employers. The employers, sympathetic or not, will have lost productivity. Overall, this one incident affecting nominally 100 children also affected at least 100 adults and probably nearly as many businesses.

Now, I'm guessing that the school caretaker or some other members of staff were aware of the problem at least an hour or two before the parents and children arrived, but it would have been impossible to phone every affected household to let them know they needed to make alternative arrangements - or so I'm sure the defensive administration would respond. However, phoning every household is a very 1980s sort of solution, and totally unnecessary in 2009.

It's safe to assume that every parent in the school has a mobile phone, so either the local education authority should have an SMS alerting service for this sort of situation, or the school, which seems to pride itself on its level of IT literacy, should set up a Twitter account and encourage parents to follow and/or activate SMS tweets. Some effort would be required, and inevitably this strategy won't cover everyone, but it's a start, and surely it's better than disrupting something like 300 lives and imposing a cost on people/businesses who are just trying to get on with earning a living. And for those delivering the bad news, surely it's a more pleasant alternative to having to stand in the rain with a limp sign encountering withering looks from outraged parents. We have the tools, so why don't we use them?

Tweeting selectively from the Citi credit conference

www.twitter.com/jimiinc #Citi

The best scam email of all time

That's a bold statement to make, but you have to admire the genius of a scam "cleverly" disguised as a compensation program for scam victims. What was the old saying about "Fool me once..."? I particularly like the professional-sounding "We shall feed with you more modalities..." phrase, as well as the fact that the email address for correspondence is in, of course, the yahoo.com.hk domain. Keep trying guys, at least the entertainment value is continually rising.

<><><><><><><><><><><><><><><><><><><><><><>

ECOBANK NIGERIA PLC
SCAM COMPENSATION OFFICE DEPARTMENT
ECOWAS NATIONS STATE/UNITED NATIONS
2009 SCAM VICTIMS COMPENSATIONS PAYMENTS.

YOUR REF/PAYMENTS CODE: ECB/06654 FOR $500,000 USD ONLY.

This is to bring to your notice that our bank (ECOBANK INTL. PLC) is
delegated by the ECOWAS/UNITED NATIONS in Central Bank to pay victims of scam
$500,000 (Five Hundred Thousand Dollars Only). You are listed/approved for
this payment as one of the scammed victims to be paid this amount.

On this faithful recommendations, want you to alert you that during the last
U.N. meetings held at ABUJA (WEST AFRICA), it was accessed/accumulated of
reported cases of fraud that the money lost by variousindividuals to Africans
scam artists operating in syndicates all over the world today is over $239
Million United States Dollars in year 2007 to fraud in USA alone.

http://www.techspot.com/news/29644-US-Citizens-lost-239-million-from-Internet-
fraud-in-2007.html

In other to compensate victims, the ECOWAS/UNITED NATIONS is now paying
victims of such scam $500,000 (Five Hundred Thousand Dollars Only Each ).in
accordance with the UNITED NATIONS recommendations.

The payments are to be remitted by ECOBANK PLC NIGERIA as corresponding
paying bank under funding assistance by CENTRAL BANK OF NIGERIA. Benefactor
of this compensation award will have to be first cleared by ECOBANK and
confirmed as a victim from Africa Scam before scam payment can be effected.

We shall feed you with further modalities as soon as we get response from you
on how you can receive your compensation payment award.

Send a copy of your response via email or call your remittance officer
quoting your PAYMENT CODE NUMBER(ECB/06654).


NAME: MR.KEN OSAZUWA
SCAMMED VICTIM/REF/PAYMENTS CODE:
ECB/06654 $500,000 USD.
TEL : +234 7025669085

Email: scamvictimstransfer@yahoo.com.hk


Yours Faithfully,
Mrs. FRANCA OSARO
PUBLIC RELATIONS OFFICER

Another incumbent buys open access fiber

Private-equity owned companies are frequently the subject of ridicule, due to a perception that they're purely run for cash, by shareholders who are always looking for the exit, and who, in some cases are clueless. That point of view is often justified, and there are other situations where very bright and talented people who are genuinely committed to the business end up in untenable situations, but there are also some comparatively rare situations where the PE sponsors genuinely seem to understand how to build value and innovate in ways which public companies struggle to match.

Take TDC, whose shareholders were not only bold enough to basically pay the record industry to shut up, but are now following KPN into open access fiber, purchasing c.60% of the network assets (apart from those involved in monitoring the grid) of the unfortunately named DONG Energy, for DKK325m cash plus an additional DKK100m in earn-out structured as a revenue share. The key difference here is that DONG has built out much more extensively than Reggefiber has. Two summers ago, when on vacation in North Zealand, I remember driving through small villages, remote by Danish standards, where fiber was being rolled.

By allowing DONG to take the capex and commercial risk in deploying the network, TDC avoided having to listen to lenders complaining and fretting, until the asset was mature enough to buy in. (It always fascinates me that investors prefer M&A to capex.) From DONG's perspective, it seems as though the company struggled to build a customer base in the absence of third party carrier relationships, which of course TDC has in abundance, so it probably was an inescapable outcome that DONG would sell out and leave the telco-ing to the telco.

Britain's Embarrassing Travesty?

If you're planning to make an inspirational video about fiber which makes the viewer contemplate suicide within the first three minutes, I think I have a template for you to follow. "Patience is a virtue of the past." Indeed. In fact, it looks like patience in some quarters was exhausted some considerable time ago. Note the call to action towards the end:

If Ofcom will not lay down the law on this one, or at least issue some guidelines or a Code of Practice about NGA marketing to stop this in its tracks, I will personally pay a bunch of very cheap workers to spend as long as it takes out on the Internet making sure that as many websites as possible have either a forum post, blog comment, banner ad or similar on it saying something along the lines of "BT's BET is NOT next generation broadband. Complain now. Boycott BT."

Funny how these things can spread virally and unpredictably, which is something I thought marketing departments were supposed to understand by now. I notice that there currently seems to be no Facebook group with a title such as "BET = Britain's Embarrassing Travesty." Not that I'm advocating that someone start one. But if they did, I would join it.

My big fat Greek restructuring

Well, looks like the third party interlopers in the WIND Hellas situation waited a bit too long to show their hand. However, the investment from Weather only delivers EUR50m in additional liquidity to the company, with the remaining EUR75m going to consent fees and transaction costs. Once the subordinated debt holders have been crushed (the FRNs are quoted 3 - 5, and the PIK notes are looking extremely hot at 1/16 - 9/16), the company should save c.EUR95m in interest costs before taking into account the margin increases for the senior lenders. In short, the company should be stabilized by this deal, but things are going to be tight for a long time, and the market still needs to consolidate, so let's call it Chapter One.

A question for European equipment vendors

Q: How do you compete with a privately held national champion with a $30bn credit line?

A: Maybe you don't.

(P.S., Starent is in the process of being acquired by Cisco, so you'll probably be seeing them around a bit more too.)

Tuesday morning drive-by

Still trying to recover from eComm last week in Amsterdam, and get caught up on other things. I would love to do a lengthy post on eComm, but I don't have the time, unfortunately. Stated simply, I think it is the finest event of its type on the planet. Lots of short and punchy presentations, many of them challenging and provocative, covering a wide range of aspects around communications (note my omission of the prefix "tele"), with a low tolerance level for bullshit, and good representation from people who are actually doing innovative things. Not many carriers were present (I counted four), but then why would carriers be interested in new developments in communications? And no IMS, HADOPI, or any other toxic and delusional acronym-based strategies were to be found - heaven! I gave a 15-minute talk on day one, and moderated a panel on day two. Wish I could have stayed for day three, which sounds like it was very interesting indeed. Take my advice - bookmark the next event and just go. You won't regret it.

Speaking of interesting events - tomorrow I'll be moderating a panel at Telco 2.0 in London, which has apparently seen a huge level of interest and registrations. I'm looking forward to the event and the Thames River cruise which follows. Hope to see you there!

I've come to the conclusion that my "social media brand" strategy is inevitably doomed to be one of fragmentation. Sometimes I have something to say or point to which is suitable for this blog, but which I just don't have time to write a proper blog post on. If you're interested in capturing any of that stuff, you may wish to follow me on Twitter. I know it is probably over-hyped as a medium, but it is imminently suitable to certain types of expression, such as "31bn? That's 3x BT's market cap, or one national FTTH network. What's that burning smell?" Alternatively, you may just wish to friend me - I already consider my mega-uber value readers to be friends I haven't met, so why don't we formalize things?

So, on to the industry/market:

Data centers - You have to love data centers, well I do anyway. The unsung heroes of the web services revolution, they work away in quiet anonymity and throw off disgusting amounts of cash if run properly - and we don't have nearly enough of them. We tried like hell to get a Greater London project funded while at Merrill Lynch, but timing and the parlous state of the firm's balance sheet thwarted us, sadly. Judging from Telecity's statement from yesterday, our investment case still stands.

Ride that high yield bubble - Virgin Media, which is a company I have a lot of time for, despite my frequent mocking posts about open street cabinets, continues to demonstrate that continuity issues in the CFO's office need not be an impediment to sound financial management. Following last week's acceptance of its senior facilities amendment, the company is wasting no time in lining up refinancing options for the lower parts of the capital structure, which is exactly what it should be doing given the opportunity which the market's thirst for yield has created. What looked to be a very steep mountain to climb at the start of the year, has been handled masterfully in my view, and the second lien debt, which is something we loved at the beginning of the year at 50, is now quoted 93.5. I don't often think of congratulating company treasurers, but here's to a job well done.

Greek consolidation - This is a topic we did an awful lot of work on at Merrill Lynch, and the ongoing WIND Hellas saga has been very much on our mind since the beginning of the year. Now a "wild card" bid has reportedly emerged from what most would regard as an unlikely source. However, I have previously worked closely with some of the people involved behind the scenes here, so I, for one, am not surprised, and I think things are going to get very interesting from here.

Waving from afar

Folks, a very altruistic Palladium Class mega-uber value reader has commented on my previous post to let us know that he has a surfeit of Google Wave invites, and that if you ping him and ask nicely, he'll pass them on to you. Thanks Peter!

Calling all Bulgarians!

If you're Bulgarian and have any views on broadband, my friend and fibrous co-conspirator Benoit Felten needs your help in completing a survey for the good of the country, so get yourself over to the site and take part, faster than you can say Ivo Papazov.

Waving goodbye

Okay good people, I have two major problems. Firstly, a number of people have posted requests with no email address. Google Wave makes you more productive, apparently, but not psychic. Secondly, and more importantly, something seems to have gone terribly wrong. Wave crashed earlier and prompted me to refresh, and when I did my remaining invites were gone. I had dished out five and still had three left. I've retained the details of those requests I wasn't able to honor, and if I get more invites, or my remaining ones are restored, your requests will be honored. For those I was able to fulfill, be advised that it may take some time, as it seems there are some scaling issues.

Waving, not drowning

Still trying to recover from the eComm experience and catch up on other things, so drowning is not far from the truth, but meanwhile, I have eight [8] Googlewave invitations for first-comers.

My slides from eComm

Scribd doesn't maintain the animations, so you may prefer to download it here.

Like I said a few hours ago...

Data centers are the new steel mills, and every bit as hot. Just a few minutes ago, Equinix announced the acquisition of Switch & Data, at what I work out to be around 10x LTM EBITDA (10.5x if you use numbers up to Q2, and 9.5x using my Q3 guesstimate). I'm sure this is dramatic news for S&D shareholders, but it's really pretty unsurprising if you've been watching what's been happening in the space over the past three years or so, as I have. This is just the opening salvo in what I expect will be a new phase of consolidation, and I would expect European assets to be pretty high on the agenda.

I'm too sexy for my picks and shovels

An adviser to Goldilocks has apparently been channeling the spirit of Horatio Alger, Jr., and unsurprisingly receiving some unsympathetic coverage in the process. Still, for good or evil, inequality is an inescapable fact of life, particularly in business. So setting aside investment banks, which other brazen, rapacious industry is shamelessly enjoying demand for its product outstripping supply three-to-one, with pricing up 15% this year, in the midst of the deepest recession in living memory? All hail the humble data center.

Don't shrug at ATLAS 2009

Thanks to @kerryritz for the pointer on this very interesting presentation on the ATLAS Internet Observatory 2009 findings from the NANOG conference. The most interesting findings from my point of view are: 1) the rapid concentration of content sources (only 150 ASNs account for 50% of internet traffic, with CDNs accounting for 10% and Google alone for 6%); and, 2) the apparent decline of P2P in favor of streaming and direct download, although I find it notable that the authors point out that data is distorted by random port selection and the fact that 40% of P2P is encrypted.

Call for input

I'm in the process of putting together my slides for eComm next week in Amsterdam, and I wanted to ask for your input, gentle reader. If you would be so kind as to send me the three most critical issues which the communications (notice I did not say telecom) industry faces in future, I would be very interested to see them. By critical issues, I mean opportunities and/or challenges, both endogenous and exogenous. I'm just curious to see how your ideas line up against my own.

Cognitive Dissonance

Is it just me, or are the terms "2016 maturity" and "terrestrial broadcaster" not mutually exclusive?

Christmas come early

I have two tickets to eComm Amsterdam, 28 - 30 October, up for grabs. One is *F*R*E*E* and the other entitles you to a 50% discount. First come, first served, but please only ask if you are absolutely sure you are actually going to go. Holler at me.

UPDATE: Well, that didn't take long. The free ticket is now gone, which leaves the 50% discount ticket. Don't be shy.

That was the week that was

I think I may have confused or annoyed a number of mega-uber value readers with my post on the arrival of the Memphibian blog. Make no mistake, it is not supplanting this humble bloglet, but during the first couple of weeks I had to ensure I had seeded enough content there to give it a life of its own. As in everything, I will strive for balance going forward.

So, among the things I noted but failed to comment on last week, here are the ones I found most interesting:

The Skype and European Directories (a MacQuarie LBO) tie-up looks interesting, and I would expect some of the other directories players to follow suit, if they know what's good for them (the jury is out on that one). However, for me the bigger message in this deal is of how the previous owners of both assets squandered their potential. In the case of Skype, it's ironic that only as the business is sold by eBay does it begin to fulfill some of the potential used as rationale for doing the transaction four years ago. And on the directories side, this deal shows the obvious potential of tying together customer data, advertising, and sponsored telephony - something the telcos didn't seem to contemplate when they owned these directory assets. Now whatever value might be generated with this formula once again accrues to someone else...

A couple of big validations for fiber in the week, with BT capitulating on brownfield FTTP, probably in recognition of the threat posed by Virgin's DOCSIS 3.0 marketing, and Telefonica trumping Vivendi's one-month old bid for Global Village Telecom at a 14% premium, with in-market synergies that Vivendi can't get anywhere near.

The profound and ridiculous ends of the iPhone App spectrum were on display on Friday, with Herman pointing us towards the ludicrous (but entertaining) Gym Babes app, while the HealthMap project's iPhone app has generated 1,000 reports since launch a month ago. As the project team says, "This form of participatory epidemiology may alert the public to valuable disease information before it is reported by the media or public health officials," which is bound to have an inestimable value. All this is fascinating, though if Gartner is right in predicting that Android will eclipse the iPhone juggernaut by 2012 due to its open-source framework and multi-vendor backing, then presumably app developers are going to have to start hedging by developing for both platforms. This despite the fact that I am told repeatedly that investors currently have no time or appetite for anything non-iPhone in nature, and Kleiner Perkins Caulfield have taken a highly directional bet on iPhone hegemony.

From the "Yeah, whatever" department

I think one of the first rules of marketing is that merely repeating an assertion ad nauseum doesn't make it true, particularly if the direct experience of your existing users shows it to be false. Yahoo! seems to be doing its best to pull the outdoor advertising marketing out of its deep recession with this campaign splashed all over London. Meanwhile, I have a colleague who uses Yahoo! mail, and for the past two months, he would say that the internet has been under the control of a Diabolical Denial of Service attack. I don't know if this is an isolated problem, or relates to his being a Mac user (as if that should really make any difference), but seeing his suffering, I am now programmed to ignore or laugh at billboards like this. Also, in case no one at Yahoo! corporate had clocked it, hooded figures like this in the UK are associated with muggings and other pointless acts of antisocial behavior, so my guess is that drivers passing this billboard will immediately assume it is yet another government fear appeal message and pay no attention.

Your lucky day

One of my colleagues received this message today, which, apart from being risibly written and fundamentally ludicrous, points out just how mainstream Skype has become, if 419 scammers are invoking its name, particularly alongside that of Microsoft.



Date: Fri, 9 Oct 2009 19:03:24 +0800
> Subject: Congratulations!! *You Have Won 850,000.00 GBP
> From: dzplum@yahoo.com
>
>
>
>
>
> World Annual Skype/ Microsoft Internet Users Award
> 102, Denton Manchester Lancashire M34 3GE
> Annual Random Charity International
> United Kingdom
>
> Dear, Lucky Winners
>
> We happily announce to you the draw of 2009 World Annual Skype/ Microsoft
> Internet Users Award International Program held annually, in United
> Kingdom. Your e-mail address attached to ticket number: 500-744-3465-A42
> with serial number: 652-112 and draw lucky number: 7202013-05 which
> subsequently won you lottery in the 1st category of files number:
> FA1345U-ID.
>
> Batch Number.0152k Reference Number.02-QH-05 you have therefore been
> approved to claim a total sum of 850,000.00GBP (Eight Hundred and Fifty
> Thousand, Great Britain Pound Sterlings) in Cheque,
>
> All participants in this lottery program were selected annual randomly
> through a computer ballot system, drawn from 100.000.000 individuals email
> addresses from all search engines. Your e-mail address was picked by the
> automated computer ballot system, which has been programmed for this
> random selection. This has eventually qualified you to won our lottery
> prize.
>
> This promotional program held annually, and was promoted and sponsored by,
> Microsoft Inc, and Skype Internet Companies to encourage the use of
> Internet globally together with enhancing improves the lives of citizenry.
> Please note that your lucky winning number falls within our Europe
> representative's booklet in United Kingdom , as indicated in your file
> number: FA1345U-ID. In view of this, your 850,000.00GBP Cheque have be
> released and forwarded to our United Kingdom regional headquarter in
> Manchester, you are hereby informed to contact Manchester on this
> information, for the immediate commence of your Cheque
>
> Mobile Number: +447024064610
> +447024087960
> E-Mail: worldannualskype@yahoo.com.hk
>
> Fill the following details below to enable the speedy evaluation and
> processing of your won prize. 1 Name, 2 Home address, 3 Telephone number,
> 4 Age and occupation, 5 Ticket number, 6 Serial numbers, 7 File number, 8
> Draw number
>
> For security purposes and clarity we advice that you keep your winning
> information confidential, and not to be disclosed to anyone until your
> claim have been fully processed and your winning Cheque delivered to you.
> BE WARNED!
>
> National Coordinator
> Skype/ Microsoft
> Mr Amoosa Amoosa
>

Benign neglect

It's quite probable that this will be of absolutely no interest to the vast majority of my mega-uber value readers out there, but on the off-chance that you are curious as to where I've been recently, I've been working on a purely personal side project, partly because it makes me happy, and partly because I feel I need to. It doesn't help that the past couple of weeks in telecom have left me feeling distinctly uninspired - is it just me?

Questions to ponder over lunch

Is Huawei the Countrywide of vendor finance?

How can a perfect digital copy be considered a "forgery"?

Doesn't "360" also mean turning around to find yourself exactly where you started?

Pimp my panel

Folks, eComm Europe is coming up fast, October 28 - 30 in Amsterdam, and you'll hate yourself if you miss it. I honestly think the speaker list is unparalleled anywhere, and the format ensures a rich flow of sharp and challenging talks on a wide range of topics of critical interest to those of us linked in the communications value chain. So look into my eyes, look deep into my eyes, and now go and register. I will be giving a talk on day one, and also moderating a panel on day two. The panel format is still being tweaked, but I have submitted the following summary, and I'd be interested to hear your feedback and input in the interest of making it as representative as possible:

Investing in the Telecom Value Chain for a Post-Meltdown World

The world has been through huge financial stress in the past two years, and despite the repeated sightings of "green shoots" by the more optimistic factions on Wall Street, many respected forecasters predict even more dire developments to come: the death of the dollar as a reserve currency, persistent high unemployment and social displacement, drastic cuts in public sector spending, runaway inflation, social unrest, the death of capitalism. While many of these outcomes represent worst case scenarios, we must accept that the "recovery," whenever it arrives, is not going to be a "reversion to business as usual," as the term is commonly defined. Consumers will behave differently and have different definitions of value, businesses will transact differently, entire industries will emerge smaller if indeed they survive at all. Add to this the increasing pressures of urbanization, migration, aging society, and climate change, and the picture becomes even more challenging. What influence will the telecom value chain exert in this new world? What opportunities do the challenges of The New Normal offer investors, and how should they position themselves?

Supersize my toast

I've seen a lot of stuff recently that I don't understand, but if we needed any evidence that this credit market rally may be getting a bit silly, I think I may have found a compelling shred. A couple of days ago, Blockbuster announced an offering of "up to" $340m in senior secured notes, but LCDNews has just reported that this offering has been up-sized to an unfathomable $675m. Most of the deals I've come across recently have been up-sized, but not doubled. The coupon may be huge, I don't know yet, but what else could make this so compelling that demand could lead to a supersizing like this, especially with incineration such a strong possibility?

Lunchtime drive-by, 16 September

Europe is grindingly dull today compared with events elsewhere:

Australia - Life gets more interesting with each passing day for Telstra and its shareholders, as it deals with both the implications of structural separation and yet another catastrophic network outage.

New Zealand - The government tells Telecom and Vodafone to take a flying leap with their proposals, in favor of a highly-localized procurement process for open-access fiber.

Taiwan - Taiwan Mobile buys MSO Kbro for 10.0x LTM EBITDA, a great exit for Carlyle into a much more interesting asset. Surely a company with ubiquitous mobile coverage will also desire a more extensive fixed footprint, particularly if it is only 1.2x levered and can afford to do more - i.e., further consolidation seems inevitable.

Adobe/Omniture - I think I understand what is happening here, or at least I understand the rhetoric around it, but Hank Williams' recent post highlights failings which make me wonder just how well the company will engage with the more demanding customer base it will carry as a result of this deal.

Head-scratching time

Whatever its shortcomings as an industry, one can always count on telecom to deliver unusual and inexplicable M&A activity. Down in Greece, ON Telecoms and Vivodi, two companies I studied in great detail once upon a time in a previous incarnation, have decided to get together, in a somewhat unusual deal. Having presumably already burned a lot of cash on their own company, I'm puzzled as to why the vendors would pony-up for the entire capital increase required to get the deal done, especially when the Greek regulator seems to be giving incumbent OTE more room for maneuver on marketing of bundles. Perhaps there's some trade-off in terms of footprint complementarity, but I would be amazed if that could account for the valuation implied by the deal, EUR250m, i.e., the same as Forthnet's market cap, though Forthnet has more subscribers and also a monopoly position in satellite pay-TV.


UPDATE: Okay, I think I was probably a bit too kind here. I think this is about saving face on both sides. Greece is a pretty unique market, in that one can capture c.85% of ITC spend in just two conurbations - Attica (Athens and environs), and Thessaloniki. There's not much scope for regional niche market approaches, it's pretty much head-to-head in the big two urban centers, and there are already four big players (OTE, Forthnet, Hellas Online, and Wind Hellas) present, which history suggests is typically about the number a single market can viably support. Yes, I know that ON has Fastweb's "secret sauce" to a certain extent, but I'm not convinced that makes much difference against a more nimble OTE, Hellas Online in league with Vodafone, Forthnet, and (eventually) a restructured Wind Hellas. The latter two I do think would make an interesting asset combined, but I don't think this particular deal really moves the needle for anyone.