3G | Ian Andrew Bell https://ianbell.com Ian Bell's opinions are his own and do not necessarily reflect the opinions of Ian Bell Thu, 08 Oct 2009 22:38:32 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.2 https://i0.wp.com/ianbell.com/wp-content/uploads/2017/10/cropped-electron-man.png?fit=32%2C32&ssl=1 3G | Ian Andrew Bell https://ianbell.com 32 32 28174588 Why there’s no Kindle for Canada https://ianbell.com/2009/10/08/why-theres-no-kindle-for-canada/ https://ianbell.com/2009/10/08/why-theres-no-kindle-for-canada/#comments Thu, 08 Oct 2009 19:07:01 +0000 https://ianbell.com/?p=4989 SANY2305Canadians want their Kindle.  The device, which Forrester predicts Amazon will sell 1.8 Million copies of during 2009, is becoming a force in the publishing industry — and may well be Amazon’s iPod.  As an example of its early impact, fully 5% of the early sales for Dan Brown’s latest book were Kindle-downloaded.  Of course, all of this is irrelevant if you live in Canada.

Conspicuously absent this week from Amazon’s announcement on the list of international markets where the Kindle would soon be sold in a host is a little backwater known as Canada.  Theories abound as to why this is:  some blame Heritage Canada, which I think is a bit of a lark.  For one thing, Heritage Canada is not a regulatory body in the sense that it enforces no laws, and has no specific jurisdiction over the publishing industry in our country apart from administration of the Copyright Act.

No, the politics involved in preventing the Kindle from reaching the grubby hands of Canadian consumers is probably the same old culprits we always pick on around here:  Canada’s wireless carriers.  This article reveals a bit of a crack in the story.  While the Domestic US Kindle is using the Sprint EVDO network, Amazon is not working with local wireless partners in each individual country for the International version… the company has done a single deal with AT&T Global Networks, which in turn has gone out and negotiated low-cost data roaming agreements with carrier partners all over the world.

The Kindle, you see, downloads books and connects via AT&T’s 3G Data Network.  But it is a unique proposition for the wireless carriers, because the Kindle subsumes the carrier’s network and buries it behind Amazon’s brand.  As a result the customer is completely unaware of which network the Kindle is running on, never receives a bill from AT&T, and never calls AT&T for support.  It is a complete inversion of the traditional wireless carrier model.

In Europe some carriers embraced this, as has AT&T Global, and pitched Amazon on providing the network capacity for the Kindle.  In Canada, however, the concept of becoming a bare pipeline has likely met with a far chillier reception from the omnipotent stewards of our wireless spectrum.  While AT&T may have negotiated decent wholesale rates for its customers roaming on Rogers in Canada enabling affordable world data roaming, Rogers may have (knowing their personality well) stipulated that this wholesale rate not be resold in any way apart from direct-to-consumer.

And just as Rogers resisted Apple’s will to gradually subsume them as a carrier, and is now paying the price by being the first iPhone operator in the world to officially lose iPhone exclusivity, Rogers likely isn’t enthusiastic about Amazon taking over the customer relationship.  The irony is they probably should be — their quality of service and customer support is so absurdly poor that they could do no better than by washing their hands of the customer relationship entirely.

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Rogers Wireless iPhone 3G = FAIL https://ianbell.com/2009/06/22/rogers-iphone-3g-fail/ https://ianbell.com/2009/06/22/rogers-iphone-3g-fail/#comments Mon, 22 Jun 2009 20:35:38 +0000 https://ianbell.com/?p=4778 iphone-beaver.gifHave you had problems returning a damaged iPhone to Rogers Wireless?  If so, I’d like to hear about it in the comments.

It has been a year since Apple and Rogers Wireless launched the iPhone 3G in Canada.  It was that summer, in 2008, I unloaded my first-generation unlocked iPhone for a legit iPhone 3G from Rogers Wireless.  One of the benefits of having a carrier-supported iPhone is, of course, supposed to be seamless warranty replacement.  Shortly after I got it, my iPhone began dropping calls and failing to dial out on the network.  I assumed this to be A) a problem with Rogers’ network, B) a firmware bug in the iPhone itself, or C) a combination of both.

I had heard things about chipset problems afflicting AT&T iPhone customers so I assumed this would be remedied in a soon-to-follow update from Apple.  By October of 2008, I had given up.  I called Rogers tech support and was walked thru the usual “wipe it clean and pray it’s fixed” procedure and tried it for two more weeks but no joy, so in November I instigated the phone swap process from Rogers.  The call was short and sweet and all seemed to be well with a new iPhone winging its way to our house.

On the Friday before my iPhone was to arrive, my SIM suddenly stopped working and my iPhone could not connect to the Rogers network at all.  I later found out that this was due to the fact that my phone number had been reprovisioned to a new SIM that was in the box accompanying my iPhone.  Odd.  It was obviously my iPhone that was broken, not the SIM, and I just couldn’t fathom why they wouldn’t just give me a 1-800 number to call to activate the new SIM when it arrived versus forwarding my phone service to a brown box in the back of a UPS truck, leaving me without my phone service for 3 days.  I called Rogers (from my Vonage line) to complain, spent an hour and a half on the phone, and could not get this resolved after bouncing around 3-4 agents.

On the following Tuesday, the replacement iPhone arrived.  I tried starting it up, but it wouldn’t boot.  It had a substantial hardware problem that led to garbage on the screen and all kinds of other garbage, but in effect the replacement phone was DOA.  As I had to go on a business trip that day, I put the new SIM in my old iPhone and left the new iPhone for a week or so before I tried it again, this time putting the replacement thru all kinds of hardware resets and software reloads.  I could not resurrect it from the dead despite hours of trying.

So I called Rogers.  Again.  After two hours bouncing around various agents in various departments, I could not get an agent to take responsibility for my problem, instead each agent dispatched me to another department as I (admittedly) became increasingly irate.  One agent accused me of lying, and/or not knowing what I am talking about.  Finally I threatened to QUIT Rogers, switch to Telus, and sue them for breach of contract — I was transferred to a magic save department where I met a very nice lady who calmed me down, promised to solve all of my problems, and who would call me the following week which was, now 7 weeks after the Odyssey began, Christmas.

Needless to say, she never did call back.  Never solved my problem.  Probably got laid off.  Might be working for Bell Canada right now, for all I know.

Next I began to receive a torrent of threatening letters demanding that I return my old, somewhat functioning iPhone or I’d be charged $780.    I called Rogers again in January trying to resolve the issue, but to no avail:  Rogers Wireless wouldn’t take the badly broken replacement iPhone back without also sending my other one, leaving me phoneless.  I gave up after the best I could do was an agent telling me I had to send BOTH iPhones in one shipment to their call centre.  Fuming, I waited another few days to call back.

Eventually on my next call,  an agent relented: I kept the semi-working iPhone, sent back the badly broken replacement iPhone.  I packaged up the replacement phone and sent it back, recording the shipping tracking number from UPS.

Then the predictable happened.  They charged $780 to my card.  I was furious, but sugar-coated my attitude and called back AGAIN to ask for a refund.  After bouncing around to various departments, each complaining about the slowness of their computers, they could not track the whereabouts of the iPhone I had returned, despite the fact that I could even tell them the name of the signing agent who had received the package.  I nearly hit the ceiling.  I threatened a complaint to the CRTC (which, in fairness, I have every right to do).  Finally someone agreed to help me.  One quirk:  They couldn’t refund the $780.Instead I got a credit — in effect I was loaning Rogers money — against future use.  A compromise that irritates me, but was under the circumstances acceptable.

Now it was March.  By my logs of various telephone calls to Rogers, I had now spent about 9 hours on the phone with Rogers attempting to address a single issue spanning more than 6 months.  I was so exhausted with the process that I accepted the neutrality of being exactly where I was technically, and further behind financially, than when the problems began — with an iPhone that didn’t fully work and with my wallet $780 lighter but an account credit.

It wasn’t until late last month that I mustered the courage to call again and try to get a new replacement iPhone.  I had assumed that these processes, immature at the time I first endured them, may have seasoned and smoothened with time and experience.  I called again, had a very pleasant half-hour call with an agent, who whisked me a new iPhone 3G toot sweet.  As before, my phone service was disconnected for a couple of days after they shipped the replacement phone, but by now Stockholm Syndrome was taking effect and I was becoming numb to the varied mistreatments by my captor.

The very same day the new iPhone 3G arrived, I cracked open the box, dropped in the new SIM, zeroed my old iPhone, and boxed it up for shipping.  UPS picked it up that very day, May 28, 2009.  I expected to hear nothing of the issue further.  According to the UPS tracking data, the package arrived the following week, on June 6th.  On June 14th, Rogers sent me a letter threatening to charge me $730.

rogers-notice

I cannot fathom that within 8 days, Rogers could not process and acknowledge the receipt of my RMA’d iPhone 3G.  I furthermore cannot fathom that when they do overcharge you due to their own error, they cannot refund the excess back to your credit card (which is how I pay for my phone service).

Rogers is a company clearly hampered by its own hugely restricted billing, provisioning, and customer service systems.  Ted Rogers, five weeks before his death last year, spoke to an audience marshalled by the local YEO chapter, which I gratefully attended as a guest of Mario from ShowTime Tickets.  Two thoughts of Ted’s permeated his frailly-voiced speech that day.  He said, of customer service, that “the secret to good customer service is always saying yes” and that his success as CEO was directly tied to the number of layers that existed between him and his customers — the fewer the better.

I know that it’s difficult dealing with the kinds of customers iPhone brings to the table and the scale of operations necessary to support the volume that a device like the iPhone can generate for Rogers.  Not easy.  But I wonder what Ted would think after reading this story?

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iPhone 3G Launch: Big media black-eye for Rogers https://ianbell.com/2008/07/11/iphone-3g-launch-big-media-black-eye-for-rogers/ https://ianbell.com/2008/07/11/iphone-3g-launch-big-media-black-eye-for-rogers/#comments Fri, 11 Jul 2008 21:06:31 +0000 https://ianbell.com/2008/07/11/iphone-3g-launch-big-media-black-eye-for-rogers/ ruinediphone.png

Even after the stores opened and the customers have packed home with their lawn chairs, the disaster that has been the iPhone’s launch in Canada continues to ring (pardon the pun) in the ears of consumers. I took a spin around Vancouver on my motorcycle (sorry, going too fast for photos) this morning at 7:30 and counted 250-300 people at the Broadway & Arbutus Rogers store, some TV trucks, and some balloons but otherwise not much fanfare. The smaller stores had maybe a dozen or so people hanging around at best.

I was concerned that the media were going to get taken on a ride by Rogers with this launch. Fortunately, the CBC is reporting that desperately few of the customers who were encouraged by Rogers to go to Rogers flagship stores in 6 Canadian cities have walked home with the prize, while still others are getting denied the purchase because some Rogers outlets are showing preference to new customers (and thus, highly-spiffed new activations) over existing ones. The CBC has thus far been on the money on this issue I hope this REAL story is echoed in other media over the course of the day.

As Daniel Smith reported, Apple may have heard the more than 63,000 voices at RuinediPhone.com and diverted shipments destined for Canada to elsewhere. Plausible, but this clear internal “leak” might actually be a way for Rogers to blame the lack of supply on Apple in a very subtle way.

This is what happens when big, arrogant service providers who fail to remain customer-centric come into contact with a mass-market trend. The launch of the iPhone in Canada could (should) have had a huge impact on subscriber loyalty and shareholder value for Rogers, but today even those few folks lucky enough to actually have paid through the nose and signed their lives away on a 3-year contract to get an iPhone are embittered by the experience.

It seeps down from those obnoxious gouging prices and the three-year lock-in (in an industry where the life cycle of a phone is less than 2 years) all the way to the flagship Rogers store passing out Granola Bars from Costco instead of paying the overnight campers the respect of some eggs or pancakes (they promised ‘breakfast’).

Somewhere in between those two offences is the fact that, with diminished supply on hand, Rogers store managers failed to tell those in the lineups that there weren’t enough devices to go around. Moreover they failed to give those people any promise that they might get one sometime in the future, so as a result many fan boys have now sat on their asses outside a store all morning for nothing.

Rogers created a media event around the iPhone launch.. great for free marketing, bien sur. They made promises about special promotions and breakfasts and early openings for these stores, and encouraged crowds to concentrate at specific stores to make sure they’d be part of the media frenzy and make the event seem much larger in scale than it actually is. It’s an even trade, I guess, when the consumer ends up getting what they went there for. But with the biggest stores having fewer than 100 units on hand you can do the math: of those 200-400 people who waited at each of the flagship stores, as many as 75%-80% did it for nothing.

In essence, Rogers exploited them to generate buzz and get some free marketing, and gave them nothing in return. So let’s do the math: A Triple-Lock for the lucky few, a lost night’s sleep for many, and for everyone a granola bar.

Yeah, screw you too, Rogers.

The next thing I’ll line up for is to be the first subscriber on the nation’s next GSM wireless carrier.

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Rogers Communications iPhone Backlash Solution: Unlock the 3G, Too https://ianbell.com/2008/07/03/rogers-communications-iphone-backlash-solution-unlock-the-3g-too/ https://ianbell.com/2008/07/03/rogers-communications-iphone-backlash-solution-unlock-the-3g-too/#comments Thu, 03 Jul 2008 15:50:27 +0000 https://ianbell.com/2008/07/03/rogers-communications-iphone-backlash-solution-unlock-the-3g-too/ In a week, when Apple FanBoys are lined up outside the Rogers and Fido stores to purchase their iPhones and get locked into Rogers’ draconian service plan for the next three years, yours truly wil be cooling his heels waiting for a shipment from the UK to arrive at his door. In this package, likely a week after the launch, will be contained a couple of 3G iPhones from a friend in London.

This is a critical opportunity for you to vote against Rogers with the only ballot that counts: your wallet. You too will be able to purchase unlocked 3G iPhones from him on eBay about a week later.


Why go to the trouble? Well, let’s just say I’m conflicted. I want the new iPhone (love my old one) but I don’t want Uncle Ted taking my purchase of one as an endorsement of his brutal pricing plan. The Globe & Mail makes the following comparison:

“For example, for $75 a month, Rogers provides 300 weekday voice minutes, 750 megabytes of data and 100 text messages. In the United States, a customer gets 450 weekday voice minutes, unlimited data and 200 text messages for the same price.”

750MB for a frequent iPhone user, particularly one who uses the navigation and web browsing tools, is nothing. But in particular it’s the three-year lock-in that requires the greatest consideration. At that end of the deal, Rogers has you by the short-and-curlies. And your obligation to them will almost certainly outlast your 3G iPhone. Needless to say, many of us are pissed.

So how does it work? Well, let’s just say that you can finally thank the French for something.

Thanks to French law, it is illegal for Apple (or any mobile phone handset maker or carrier) to sell a locked phone in the French marketplace without also making the same device available in the popular pay-as-you-go mode, fully unlocked and portable to any carrier.

This puts a stick in the mud for Apple’s lock-in plan and means that France will likely be selling a substantial number of 3G iPhones, until ZiPhone learns how to software unlock them, to eBay resellers like my friend.

So yes, please go and sign the petition at RuinediPhone.com but, since I know you’re going to buy one anyway, get the French iPhone instead of buckling under peer pressure to lock into Rogers’ data plan. It might cost you more in the short run (ironic) but in the long run you will force things to change.

Software unlocking has already forced several key changes in Apple’s strategy that favour the consumer. But a flop of Rogers’ package pricing on the Canadian market can send a clear signal to both companies, and their shareholders. Industry Canada, which should be paying attention, can and most definitely should censure Rogers, and its wireless competitors for a long history of market-limiting pricing (not limited to the iPhone launch in Canada) that has rendered our country a wireless backwater.

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iPhone For Canada in December https://ianbell.com/2007/07/03/iphone-for-canada-in-december/ Wed, 04 Jul 2007 00:01:27 +0000 https://ianbell.com/2007/07/03/iphone-for-canada-in-december/ iphone-beaver.gifEarlier this year GIZMODO announced the obvious, that Rogers Wireless would eventually launch the iPhone in Canada, based on the ever-reliable “confirmation from customer service” which took the form of an apparent email… this turned out to be a hoax. Rogers is, of course, the only GSM carrier in Canada, and since the iPhone is a GSM network device, is the obvious choice, so there was little to this story other than a tease (and possibly a GoogleTrawl) for desperate iPhone fanatics north of the 49th.

Despite vehement denials and warnings from Rogers spokespeople, I have it on slightly better authority from an unnameable closer-to-the-source Rogers employee that the date for launching the Rogers iPhone in Canada will land in December — making those overnight lineups outside the Apple Store so much more pleasant!

It is, however, unclear to me whether this will be the impotent 2.5G iPhone a la AT&T, or the kick-ass 3G iPhone rumoured to be teeing up to launch in Europe in October. Launching a 3G iPhone in Canada that is rather unlocked would be great for T-Mobile and other U.S. GSM carriers, such as they are, because it’d allow people to hook up an iPhone to existing GSM accounts with other service providers, despite AT&T‘s rumoured two-year exclusivity lockout.

What most of the hysterical journalists I have read in the past few weeks have overlooked is that the iPhone is a service, and not just a device: there are provisioning systems, security standards, and feature interactions (specifically, the visual voicemail tool is not exactly out-of-the-box wireless voicemail technology) which are client-server and which require service providers to deploy network equipment to coincide with the iPhone launch. Some carriers’ architectures will lend themselves better to this than others. So it’s not simply a case of getting the handsets, and some carriers are more stuffy than others about third-party hardware and protocols riding in their network.

In this sense, iPhone is interesting not just because it’s a cool, game-changing device .. but moreso because it’s the first fundamentally new network approach to break down the bunker doors to the wireless carriers metro switching networks since RIM. And as Richard McManus points out, it’s a platform that’s carrying a lot more applications than just email.

In the meantime, insofar as wireless device crazes go, the iPhone has big shoes to fill in outselling the RAZR.

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I Want the Euro iPhone, Not the Crippled AT&TPhone https://ianbell.com/2007/06/29/i-want-the-euro-iphone-not-the-crippled-attphone/ https://ianbell.com/2007/06/29/i-want-the-euro-iphone-not-the-crippled-attphone/#comments Fri, 29 Jun 2007 17:37:16 +0000 https://ianbell.com/2007/06/29/i-want-the-euro-iphone-not-the-crippled-attphone/ iPhoneFrom RegHardware comes the scoop that Apple will announce the Euro iPhone on Monday. It’ll be available on multiple carriers (Vodafone and T-Mobile), sold unlocked at CarPhone Warehouse, and will sport 3G street cred. What does this really mean? Well, principally it means that being first in line for today’s AT&T iPhone is a complete waste of time and money, unless your only purpose for getting one is drawing a crowd every time your phone rings.

It also means that the current raft of criticism lobbed toward Apple (and toward the irrational exuberance of Apple investors hoping that Apple will turn the mobile biz on its ear) is largely a criticism of AT&T Wireless, and the limitations of a combination of the AT&TW network and the structure of the deal they likely struck with Apple.

Apple’s not stupid. They’re betting big on GSM and GSM-based 3G wireless. The unlocked “TriPhones”, available in Europe (possibly also in Canada?) come this October, will be the items to have. If you buy an iPhone this weekend then you’re going to lose a lot of value very quickly.

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WiFi Here To Stay… https://ianbell.com/2003/07/14/wifi-here-to-stay/ Mon, 14 Jul 2003 18:05:41 +0000 https://ianbell.com/2003/07/14/wifi-here-to-stay/ http://www.iht.com/articles/102711.html

Wi-Fi’s true believers see powerful ‘grass-roots’ force

John Markoff NYT Monday, July 14, 2003

  SUN VALLEY, Idaho Is the Wi-Fi boom about to bust? Even though that has lately become the fashionable view, the answer is probably no.

Critics argue that there are too many competitors trying to deliver high-speed wireless connections to the Internet. Prices for most commercial Wi-Fi services are too high, they say, and free or subsidized operations abound, including those like the one McDonald’s started rolling out last week at its fast food restaurants in San Francisco.

All this will make it practically impossible, the skeptics insist, for anyone to build a profitable business in Wi-Fi, a short-range wireless radio technology that frees personal computers from their physical tethers to the Internet.

A surprising number of true believers in Wi-Fi were present at this famed mountain resort during an annual conference, organized by the investment banker Herbert Allen, that brings together technology, media and entertainment industry leaders.

Intel, in particular, is betting a lot of its own money on Wi-Fi. And that may be exactly what the new technology needs to succeed.

Intel’s two top executives, Craig Barrett and Andrew Grove, were here this year to preach the virtues of Wi-Fi, in the belief that it will be a powerfully disruptive force in the telecommunications industry.

It has certainly been a disruptive force at Intel. The industry and analysts have focused their attention on the current frenzy to build out wireless Internet locations known as hot spots at airports, coffee houses and hotels. But Intel has a much bolder wireless plan in the works: it wants to close the so-called “last-mile” gap between homes and the Internet backbone with cheap, super-fast connections so that businesses can deliver interactive entertainment and a host of other digital products and services right into America’s living rooms and dens.

The new Intel bet is remarkable given that the company initially backed the wrong wireless standard, putting its resources behind a competing standard known as Home RF. But Intel, the world’s biggest computer chip maker, changed its strategy after company executives realized the power and potential pervasiveness of the unregulated Wi-Fi wireless networking standard.

The Wi-Fi standard was developed and commercialized at Apple Computer as early as 1999. Ultimately, though, it gained widespread popularity on its own, Mr. Barrett acknowledged in an interview here, as a grass-roots, from-the-bottom-up movement. That success stands in striking contrast to top-down wireless data strategies, like the 3G cellular approach pushed by the telecom industry, which has so far been an expensive bust.

Barrett now says that people who predict a Wi-Fi shakeout are missing the point, as well as failing to see the deeper implications of the technology. “What is missing is the realization of how many legs this technology has,” he said.

In the three months since Intel introduced its new wireless PC chips, the company has become the dominant force in the Wi-Fi market. It is now putting Wi-Fi circuitry in all of its chip sets for portable computers, investing widely in Wi-Fi industry start-ups and spending almost its entire annual marketing budget in a $300 million advertising campaign trumpeting the virtues of its unwired Centrino brand.

“Intel has raised the level of the water and is floating all the boats,” said Glenn Fleishman, editor of Wi-Fi Networking News, a Web-based daily newsletter.

Of even greater potential import, Intel plans to start a test in Texas in a few months that will use a combination of wireless technologies, including Wi-Fi, to bring broadband Internet connections directly to homes. Last week the company quietly announced that it was teaming with a small equipment maker, Alvarion, of Tel Aviv, Israel, to back a complementary wireless standard that is intended to send data over distances of as much as 30 miles and at speeds of up to 70 megabits per second. The data rate is high enough to comfortably stream high-definition television video broadcasts, and the range makes it possible to quickly deploy a system in a large urban or suburban area.

By comparison, current Wi-Fi technology is limited to several hundred feet and speeds of 11 megabits per second. The Intel test, however, will explore using the 802.16 standard, known as WiMax, to distribute the data to Wi-Fi antennas in local neighborhoods. If Intel is able to jumpstart the market to reach millions of homes with a relatively inexpensive interactive data and video service, the technology could quickly alter the communications landscape. That is already starting to happen. There is now an explosion of Wi-Fi hot spots in hotels, coffee shops, restaurants and airports, and a new wave of handheld gadgets will soon supplement portable personal computers for a class of mobile workers that analysts are calling windshield warriors.

In a speech here, Barrett sketched a portrait of a rapidly growing market. There are now about 40 million Wi-Fi users, he said, and new access points are selling at the rate of about 15,000 a day, which makes Wi-Fi a much faster-growing technology than cellular telephony.

While prices for connection times are certain to keep falling, industry executives say they are already seeing usage patterns that suggest that Wi-Fi commercial services are working and are here to stay. Moreover, they say they believe the services will complement and not compete with free services that are emerging in urban areas around the country. “We have a good business model in hotels, said Dave Vucina, chief executive officer of Wayport, a provider of Wi-Fi hot spots in hotels, airports, restaurants and other locations that is based in Austin, Texas.

In the hotels that Wayport serves, he said, the company is seeing between 8 and 12 percent nightly usage rates for each occupied room. He said he believed that the rate could go as high as 15 to 24 percent. Those numbers are credible, industry analysts said, because out of the 40 million business travelers in the United States, 30 million now carry personal computers when they hit the road.

The central issue in the debate is whether those workers will be able to meet their data needs with next-generation cellular telephone networks, or whether the far higher data rates available on Wi-Fi networks will prove preferable.

Copyright © 2003 The International Herald Tribune

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Clay Shirky: 3G is Wrong… https://ianbell.com/2003/03/29/clay-shirky-3g-is-wrong/ Sat, 29 Mar 2003 21:17:18 +0000 https://ianbell.com/2003/03/29/clay-shirky-3g-is-wrong/ http://shirky.com/writings/permanet.html

Permanet, Nearlynet, and Wireless Data First published March 28, 2003 on the “Networks, Economics, and Culture” mailing list. Subscribe to the mailing list.

“The future always comes too fast and in the wrong order.” — Alvin Toffler

For most of the past year, on many US airlines, those phones inserted into the middle seat have borne a label reading “Service Disconnected.” Those labels tell a simple story — people don’t like to make $40 phone calls. They tell a more complicated one as well, about the economics of connectivity and about two competing visions for access to our various networks. One of these visions is the one everyone wants — ubiquitous and convenient — and the other vision is the one we get — spotty and cobbled together.

Call the first network “perma-net,” a world where connectivity is like air, where anyone can send or receive data anytime anywhere. Call the second network “nearly-net”, an archipelago of connectivity in an ocean of disconnection. Everyone wants permanet — the providers want to provide it, the customers want to use it, and every few years, someone announces that they are going to build some version of it. The lesson of in-flight phones is that nearlynet is better aligned with the technological, economic, and social forces that help networks actually get built. The most illustrative failure of permanet is the airphone. The most spectacular was Iridium. The most expensive will be 3G.

“I’m (Not) Calling From 35,000 Feet”

The airphone business model was obvious — the business traveler needs to stay in contact with the home office, with the next meeting, with the potential customer. When 5 hours of the day disappears on a flight, value is lost, and business customers, the airlines reasoned, would pay a premium to recapture that value.

The airlines knew, of course, that the required investment would make in-flight calls expensive at first, but they had two forces on their side. The first was a captive audience — when a plane was in the air, they had a monopoly on communication with the outside world. The second was that, as use increased, they would pay off the initial investment, and could start lowering the cost of making a call, further increasing use.

What they hadn’t factored in was the zone of connectivity between the runway and the gate, where potential airphone users were physically captive, but where their cell phones still worked. The time spent between the gate and the runway can account for a fifth of even long domestic flights, and since that is when flight delays tend to appear, it is a disproportionately valuable time in which to make calls.

This was their first miscalculation. The other was that they didn’t know that competitive pressures in the cell phone market would drive the price of cellular service down so fast that the airphone would become more expensive, in relative terms, after it launched.

The negative feedback loop created by this pair of miscalculations marginalized the airphone business. Since price displaces usage, every increase in the availability on cell phones or reduction in the cost of a cellular call meant that some potential users of the airphone would opt out. As users opted out, the projected revenues shrank. This in turn postponed the date at which the original investment in the airphone system could be paid back. The delay in paying back the investment delayed the date at which the cost of a call could be reduced, making the airphone an even less attractive offer as the number of cell phones increased and prices shrank still further.

66 Tears

This is the general pattern of the defeat of permanet by nearlynet. In the context of any given system, permanet is the pattern that makes communication ubiquitous. For a plane ride, the airphone is permanet, always available but always expensive, while the cell phone is nearlynet, only intermittently connected but cheap and under the user’s control.

The characteristics of the permanet scenario — big upfront investment by few enough companies that they get something like monopoly pricing power — is usually justified by the assumption that users will accept nothing less than total connectivity, and will pay a significant premium to get it. This may be true in scenarios where there is no alternative, but in scenarios where users can displace even some use from high- to low-priced communications tools, they will.

This marginal displacement matters because a permanet network doesn’t have to be unused to fail. It simply has to be underused enough to be unprofitable. Builders of large networks typically overestimate the degree to which high cost deflects use, and underestimate the number of alternatives users have in the ways they communicate. And in the really long haul, the inability to pay off the initial investment in a timely fashion stifles later investment in upgrading the network.

This was the pattern of Iridium, Motorola’s famously disastrous network of 66 satellites that would allow the owner of an Iridium phone to make a phone call from literally anywhere in the world. This was permanet on a global scale. Building and launching the satellites cost billions of dollars, the handsets cost hundreds, the service cost dollars a minute, all so the busy executive could make a call from the veldt.

Unfortunately, busy executives don’t work in the veldt. They work in Pasedena, or Manchester, or Caracas. This is the SUV pattern — most SUV ads feature empty mountain roads but most actual SUVs are stuck in traffic. Iridium was a bet on a single phone that could be used anywhere, but its high cost eroded any reason use an Iridium phone in most of the perfectly prosaic places phone calls actually get made.

3G: Going, Going, Gone

The biggest and most expensive permanet effort right now is wireless data services, principally 3G, the so-called 3rd generation wireless service, and GPRS, the General Packet Radio Service (though the two services are frequently lumped together under the 3G label.) 3G data services provide always on connections and much higher data rates to mobile devices than the widely deployed GSM networks do, and the wireless carriers have spent tens of billions worldwide to own and operate such services. Because 3G requires licensed spectrum, the artificial scarcity created by treating the airwaves like physical property guarantees limited competition among 3G providers.

The idea here is that users want to be able to access data any time anywhere. This is of course true in the abstract, but there are two caveats: the first is that they do not want it at any cost, and the second and more worrying one is that if they won’t use 3G in environments where they have other ways of connecting more cheaply.

The nearlynet to 3G’s permanet is Wifi (and, to a lesser extent, flat-rate priced services like email on the Blackberry.) 3G partisans will tell you that there is no competition between 3G and Wifi, because the services do different things, but of course that is exactly the problem. If they did the same thing, the costs and use patterns would also be similar. It’s precisely the ways in which Wifi differs from 3G that makes it so damaging.

The 3G model is based on two permanetish assumptions — one, that users have an unlimited demand for data while traveling, and two, that once they get used to using data on their phone, they will use it everywhere. Both assumptions are wrong.

First, users don’t have an unlimited demand for data while traveling, just as they didn’t have an unlimited demand for talking on the phone while flying. While the mobile industry has been telling us for years that internet-accessible cellphones will soon outnumber PCs, they fail to note that for internet use, measured in either hours or megabytes, the PC dwarfs the phone as a tool. Furthermore, in the cases where users do demonstrate high demand for mobile data services by getting 3G cards for their laptops, the network operators have been forced to raise their prices, the opposite of the strategy that would drive use. Charging more for laptop use makes 3G worse relative to Wifi, whose prices are constantly falling (access points and Wifi cards are now both around $60.)

The second problem is that 3G services don’t just have the wrong prices, they have the wrong kind of prices — metered — while Wifi is flat-rate. Metered data gives the user an incentive to wait out the cab ride or commute and save their data intensive applications for home or office, where sending or receiving large files creates no additional cost. The more data intensive a users needs are, the greater the price advantage of Wifi, and the greater their incentive to buy Wifi equipment. At current prices, a user can buy a Wifi access point for the cost of receiving a few PDF files over a 3G network, and the access point, once paid for, will allow for unlimited use at much higher speeds.

The Vicious Circle

In airline terms, 3G is like the airphone, an expensive bet that users in transit, captive to their 3G provider, will be happy to pay a premium for data communications. Wifi is like the cell phone, only useful at either end of travel, but providing better connectivity at a fraction of the price. This matches the negative feedback loop of the airphone — the cheaper Wifi gets, both in real dollars and in comparison to 3G, the greater the displacement away from 3G, the longer it will take to pay back the hardware investment (and, in countries that auctioned 3G licenses, the stupefying purchase price), and the later the day the operators can lower their prices.

More worryingly for the operators, the hardware manufacturers are only now starting to toy with Wifi in mobile devices. While the picture phone is a huge success as a data capture device, the most common use is “Take picture. Show friends. Delete.” Only a fraction of the photos that are taken are sent over 3G now, and if the device manufacturers start making either digital cameras or picture phones with Wifi, the willingness to save a picture for free upload later will increase.

Not all permanets end in total failure, of course. Unlike Iridium, 3G is seeing some use, and that use will grow. The displacement of use to cheaper means of connecting, however, means that 3G will not grow as fast as predicted, raising the risk of being too little used to be profitable.

Partial Results from Partial Implementation

In any given situation, the builders of permanet and nearlynet both intend to give the customers what they want, but since what customers want is good cheap service, it is usually impossible to get there right away. Permanet and nearlynet are alternate strategies for evolving over time.

The permanet strategy is to start with a service that is good but expensive, and to make it cheaper. The nearlynet strategy is to start with a service that is lousy but cheap, and to make it better. The permanet strategy assumes that quality is the key driver of a new service, and permanet has the advantage of being good at every iteration. Nearlynet assumes that cheapness is the essential characteristic, and that users will forgo quality for a sufficient break in price.

What the permanet people have going for them is that good vs. lousy is not a hard choice to make, and if things stayed that way, permanet would win every time. What they have going against them, however, is incentive. The operator of a cheap but lousy service has more incentive to improve quality than the operator of a good but expensive service does to cut prices. And incremental improvements to quality can produce disproportionate returns on investment when a cheap but lousy service becomes cheap but adequate. The good enough is the enemy of the good, giving an edge over time to systems that produce partial results when partially implemented.

Permanet is as Permanet Does

The reason the nearlynet strategy is so effective is that coverage over cost is often an exponential curve — as the coverage you want rises, the cost rises far faster. It’s easier to connect homes and offices than roads and streets, easier to connect cities than suburbs, suburbs than rural areas, and so forth. Thus permanet as a technological condition is tough to get to, since it involves biting off a whole problem at once. Permanet as a personal condition, however, is a different story. From the user’s point of view, a kind of permanet exists when they can get to the internet whenever they like.

For many people in the laptop tribe, permanet is almost a reality now, with home and office wired, and any hotel or conference they attend Wifi- or ethernet-enabled, at speeds that far outstrip 3G. And since these are the people who reliably adopt new technology first, their ability to send a spreadsheet or receive a web page faster and at no incremental cost erodes the early use the 3G operators imagined building their data services on.

In fact, for many business people who are the logical customers for 3G data services, there is only one environment where there is significant long-term disconnection from the network: on an airplane. As with the airphone itself, the sky may be a connection-poor environment for some time to come, not because it isn’t possible to connect it, but because the environment on the plane isn’t nearly nearlynet enough, which is to say it is not amenable to inexpensive and partial solutions. The lesson of nearlynet is that connectivity is rarely an all or nothing proposition, much as would-be monopolists might like it to be. Instead, small improvements in connectivity can generally be accomplished at much less cost than large improvements, and so we continue growing towards permanet one nearlynet at a time. First published March 28, 2003 on the “Networks, Economics, and Culture” mailing list. Subscribe to the mailing list.

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Blogging From Your Cell Phone? https://ianbell.com/2003/01/08/blogging-from-your-cell-phone/ Thu, 09 Jan 2003 03:23:54 +0000 https://ianbell.com/2003/01/08/blogging-from-your-cell-phone/ http://www.theregister.co.uk/content/64/28773.html

Start-up marries blogs and camera phones By electricnews.net Posted: 08/01/2003 at 11:03 GMT

A Dublin-based start-up is to offer software to mobile operators that will enable mobile phone users to create and maintain Weblogs or “blogs” using only their phones.

NewBay Software, a privately funded company headed by former Baltimore Technologies executive Paddy Holahan, is aiming to capitalise on the explosive growth in weblogs over the past year. It is estimated that over 500,000 have been created over the past 18 months and are now starting up at the rate of about 5,000 daily.

The content of Weblogs can range from personal diaries and opinion sites to amateur publishing on sports, politics, events and reviews. Weblogs are created using PCs and blogging software that is available both commercially and for free over the Internet.

NewBay Software is hoping to capitalise on the ubiquity of mobile phones and particularly the MMS capabilities of the latest generation of camera phones to market its FoneBlog software product. Using FoneBlog, network operators provide Web addresses for customers who can then update their personal Web sites by sending text and images from their phone. If the user’s phone does not have MMS, a text only site can be created.

Speaking to ElectricNews.Net, Paddy Holahan, chief executive of NewBay and former vice president of marketing with Baltimore Technologies, said that the response from initial approaches to mobile operators had been very positive. “We think in the short term network operators will see this as an immediate way of capitalising on the new wave of camera phones.”

The company is targeting 200 operators worldwide, starting in Europe and the US, and hopes to announce the first deals within a few months. Holahan said he was hopeful of generating revenues of at least USD10 million. The company, currently employs nine people at its offices in Upper Baggot Street, may also expand into other areas eventually but for the moment is concentrating on its Weblog product, he said.

Up until now, blogging has appealed to a small band of relatively sophisticated PC users ranging from amateur journalists to angst-ridden teenagers, but Holahan says the convergence of weblogs and camera phones will crack open the market for weblog services. As well as boosting revenues for network operators, it will drive the sale of camera phones, he said.

According to research from Strategy Analytics, camera phones are expected to make up 11 percent of phone sales by 2004, while 50 million MMS handsets will be in the European market by 2004. It is also estimated that there will be 147 million camera phones in existence by 2007.

The software, hosted by the network operator, automatically stores and formats incoming messages that are then added to the user’s Web site in a diary or log fashion. As each entry is sent, it is automatically added to the top of the Web site with each day creating a new Web page. The Web site can be viewed from any Web browser and visitors automatically see the most recent entry or can click on a calendar to view previous days.

Mobile phone users who maintain their weblog using their phones will still be able to edit their sites using PCs. Holahan said that 3G phones will open up the creative possibilities for weblogs, such as including video images.

NewBay Software, which was established in November is a privately funding start-up. It is owned by a number of private investors, including Holahan, but with no venture capital involvement

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Hello Kitty Is Key To 3G Success… https://ianbell.com/2002/11/30/hello-kitty-is-key-to-3g-success/ Sat, 30 Nov 2002 11:54:37 +0000 https://ianbell.com/2002/11/30/hello-kitty-is-key-to-3g-success/ Hello Kitty may be key to 3G success By Mike Clendenin, EE Times Nov 27, 2002 (12:15 PM) URL: http://www.commsdesign.com/story/OEG20021127S0042

It’s scary to think that sophisticated 3G mobile systems may depend for their survival on Hello Kitty, that cutesy Japanese pink cat with whiskers but no mouth. But that’s what it might come down to.

Not long ago, a 3G content developer noted that backgrounds with the Hello Kitty design, which serves the same purpose as the Western world’s yellow smiley face, were one of the most popular downloads over i-mode, the mobile multimedia service offered by Japan’s NTT Docomo.

Such simple things are also trés chic in Taiwan. Sixty percent of the traffic on the proprietary i-mode service is for ring tones, background wallpaper like Hello Kitty and real-time news, according to the top executive at KG Telecom.

KGT, a relatively small operator in Taiwan, decided earlier this year to forgo its bid for a 3G license because it saw too many obstacles, such as a lack of applications, to the generation of cash in the short term. Instead, KGT turned to NTT Docomo because it offered a tip-to-toe solution. So far, Taiwan is one of only two export destinations for i-mode.

For the mobile industry, Taiwan and Japan represent interesting case studies that offer evidence of the services consumers want. Though such evidence is far from conclusive, network operators, equipment operators, equipment vendors, handset providers and content developers that are still uncertain about how to make 3G successful might well take note.

But among industry insiders, it seems, the only certainty is that data services — which require such things as licenses and network upgrades — also entail greater expenses, untested applications and a new round of experimentation with handsets and how they should be used. Of course a few operators are averaging more money per user, but that tends to be on more proprietary systems like those in Japan.

Natural communication?

The slowdown in the general telecom market also brought a sense of urgency, if not quite desperation, to those who gathered in Taipei for IEEE’s recent GlobeCom 2002. Operators, handset makers and content developers want to see data services enjoy the kind of success they are having in Japan and Korea.

Of the world’s 70 million mobile-data users, 80 percent are in Japan, noted Kurt Hellstrom, president of troubled mobile-phone giant Ericsson. “We are just starting to see the growth in mobile data. It starts with camera phones and sending pictures and one day this will be a natural way of communicating with each other,” Hellstrom said. “Nobody on the inside has ever expected that this [data services] technology shift would take place overnight.”

Yet it will happen a bit more quickly if the industry can pull itself together, observers said, and overcome political divisiveness on such issues as interfaces, protocols, formats and content billing.

For instance, 69 operators, mostly of General Packet Radio Service (GPRS) networks, have launched multimedia messaging services (MMS) based on 3GPP standards, said J.T. Bergqvist, executive vice president of Nokia Networks. In terms of network interoperability, he said, the technical issues have largely been solved, opening the service to a potential base of 300 million users. Now “it is a question of [business] agreements between the operators” that will slow things down.

And for 3G, Bergqvist said, “We as an industry have not, by and large, been able to create something that is transportable from one operator to another. We have not created something yet where two operator systems would be interoperable. We have not created open interfaces in those data-oriented systems, particularly in Japan and Korea.”

Such bottlenecks are, in some cases, causing frustrated operators to look for a shortcut to data services. That’s what happened with Taiwan’s KGT, which finally opted to purchase i-mode.

In December 1999 KGT was the first to launch the Wireless Application Protocol in Taiwan. Then in September 2000 it introduced GPRS, which was followed in August 2001 by an integrated GPRS over WAP portal called iGoGo. KGT launched i-mode in June 2002.

Executives at KGT believe the WAP protocol failed because it was primarily developed by a voice service community to help fill the gap of mobile data, making it a subset of voice.

WAP started as a value-added service and never took center stage where wireless data should have been, said Leslie Koo, chairman and chief executive officer of KGT. Handset consistency was an issue because each WAP handset had different versions of different browsers from different software vendors, so it was pretty much impossible for a carrier to provide consistent service to multiple handsets with various interfaces, Koo said.

“Sometimes your e-mail would work with Nokia handsets, but not with Ericsson’s. And once you fine-tuned it to Ericsson’s, then Motorola’s had a bug. So you are caught constantly running around and finding answers from no one because your vendor will tell you, ‘No, that’s not my problem, it’s the handsets.’ Then the handset manufacturer will tell you, ‘No, it’s not the handsets, it’s the browser.’ And the browser manufacturer will tell you, ‘Sorry, that’s an outdated version of the browser, which is no longer supported.’ ”

Meanwhile, customer complaints are rolling in, he said. This leaves the carrier wondering whether it should be a wireless-access provider, a portal provider or a service integrator of “all these very complex vendor solutions and software solutions and content platforms. It is almost impossible to manage. No wonder WAP never took off,” Koo said.

For better or worse, with i-mode, at least there are consistent standards for technical applications and business execution.

“These are not the best standards in the world, but they are standards that all i-mode service providers will follow,” he said. “They not only include the content format but also the specs to handset manufacturers. So this is the first time that the carriers can ask the handset manufacturers and also the system integrators to provide an end-to-end solution that will meet the service requirements of delivering a consistent, high-quality service.”

Common business sense suggests that the industry would learn from such a solution. So far, however, that remains questionable. “In the past, the industry, perhaps, has been guilty of just selling hardware. Glorious IDs,” said Brian Holmes, a product-marketing director for Motorola (China) Electronics.

“But in this future world I speak to, design no longer specifically speaks to just hardware. It is about understanding consumer experiences and how they want to use the product, and actually doing application design specifically around the mobile environment and targeted at specific consumers. If we don’t do that, as an industry we will disappoint.”

Nearly commonplace

Asia, in general, has had the best rollout of data services so far. In Japan and Korea, networks and, more importantly, services are nearly commonplace. And mobile-data networks are rolling out in places like Taiwan, Singapore and Hong Kong, where mobile penetration (measured by SIM card subscriptions) is nearly at or above 100 percent, which is far above many Western countries.

Even in Asia, however, some network operators think that trumpeted promises of video-streaming services won’t, in reality, pay the bills — at least not yet. In certain markets based on highly proprietary systems, such as i-mode in Japan, there could be some exceptions, of course.

During a visit to Taiwan, NTT Docomo president and chief executive officer Keiji Tachikawa told IEEE Communication Society members that in Japan even cats and dogs will eventually participate in mobile chic.

Is such a scenario farfetched? Well, in a country that created the robotic dog, Aibo, it doesn’t seem so crazy to imagine that man’s best friend, if lost, would be found with the help of a GPS device that tracks an RF chip implanted in its collar. “The potential demand for mobile services is enormous if services could be applied to objects rather than people,” Tachikawa said.

But given the realities of today’s telecom slowdown, and the sensitive nature of the rollout stage for data services, where end users’ first impressions are long-lasting, many operators will not assume that Japan’s experience transfers easily.

If operators are to learn anything from Japan, it is that, to pay the bills, they should focus on the small stuff, such as Hello Kitty multimedia messages, rather than on the promise of video teleconferencing. “Trying to do full, 30-frame-per-second video, for example, on a GPRS network is probably not in the cards given the current level of compression technology,” said Motorola’s Holmes.

Yet, as the future shapes up video teleconferencing might actually be close to realization. Operators as well as handset providers and network equipment vendors are cozying up to the notion that IEEE 802.11 access should be a part of 3G. Ericsson’s Hellstrom called it a “complementary” technology. Bell Labs fellow Qi Bi said, “Incorporating Wi-Fi into the third-generation system is an important part of the system design. 3G can provide ubiquitous coverage and Wi-Fi can cover the hot spots.”

NTT Docomo’s Tachikawa also factored Wi-Fi into his company’s 4G plans. During his keynote to GlobeCom, Tachikawa revealed a few details of what NTT Docomo thinks 4G networks should do and how they will look. “We are thinking of using a cellular system because we plan to build it by extending the coverage and mobility of the 3G system,” he said. “On the other hand, in low-mobility areas, such as indoors and in hot spots, it may be necessary to introduce a solution that incorporates wireless LAN-type technology for data transmission at even higher speed.”

Fourth-generation systems should offer a peak speed of more than 100 Mbits per second in stationary mode, Tachikawa said, with an average of 20 Mbits/s when traveling. Network capacity should be at least 10 times that of 3G systems. In practical terms, that would quicken the download time of a 10-Mbyte file to one second on 4G, from 200 seconds on 3G, he said, enabling high-definition video to stream to phones and create a virtual-reality experience on high-resolution handset screens.

In the meantime, it’s a good bet that operators will focus on early returns on investment, no matter how unglamorous the application might be. Since operators are used to a more-traditional role as connectivity providers rather than content providers — let alone creators — they will likely look to MMS as a workhorse revenue provider for 2.5G/3G data services, just as SMS is for 2G data services.

Many will be conservative, suggested Herman Rao, vice president of service network and enabling technologies for Taiwan’s FarEastone Telecommunications Co. Ltd. “We know how to make money on connectivity, but we do not yet know how to make money on content. So the challenge for operators is on the content business and services model.”

Rao, too, suspects that such simple applications as location-based maps, entertainment services and news will be the key to early 3G success. “Bandwidth is not as critical as equipment vendors try to make us believe,” he said. “Video streaming won’t be that important.”

So like it or not, Hello Kitty and smiley faces may be the way forward. And that idea might not be such a stretch, since NTT Docomo is already moving on to enabling cats and dogs.

Copyright 2002 © CMP Media, LLC

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