Wireless Spectrum Battles: What’s Efficient?

Monday March 26, 2012 – Myra Moore

As the broadcast regulators of the world ponder redistributing spectrum (700 MHz band changes in Europe and efforts to reallocate spectrum by the U.S. Congress) TV broadcasters are finding themselves in a tight spot. Arguments for moving some TV broadcasters from prime real estate on the band include claims of inefficient use of existing spectrum and a dwindling viewership of terrestrial television.

I’m not writing here about the merits or flaws of these arguments but to pose a question. If rules for the most efficient use of spectrum, which are, in part, justification for spectrum reallocation, are considered, shouldn’t all incumbent and potential spectrum holders be held up to the “efficiency light”? TV broadcasters may be able to improve on their efficient use of spectrum but point-to-point transmission for all traffic and content to smartphones isn’t an efficient use of spectrum, either.

This fight wouldn’t be occurring if not for the spectacular success of ultra-converged devices like smartphones and tablets. So if convergence can take place on the device, why can’t it take place on the transmission side? If we really want to make the most efficient use of spectrum, wouldn’t it make sense to use transmission techniques that best suit individual applications and their related content? Say, cellular transmission technology for voice, text, multiway audio and video communication; IP for select media streaming; and broadcast transmissions for live events and HD video content?

Putting aside, for a moment, the eye-roll inducing naiveté of this premise that doesn’t consider entrenched business models, current infrastructure, or the complexity and hyper political nature of forming government communications policy, it is already occurring incrementally on the device side.

In Europe and Asia there is a respectable market for receivers that tune one or more broadcast transmissions (satellite, digital terrestrial, for example) with IP streaming to offer more programming choices. IPTV operators have been combining QAM and IP delivery for some years now. And in Japan, smartphones receive cellular, IP and digital terrestrial signals.

Placing multiple tuners into a single device does little to improve efficient use of the spectrum, but it does illustrate an important point. There’s not a good reason why each transmitted piece of content to a single device must travel over a single type of transmission. Dynamic use of spectrum may not be easy from a business perspective, but it seems like if the privilege of having a spectrum license really involves an element of public trust, and not just a simple exchange of money, it should at least be taken into consideration.  

Wal-Mart-Vudu Deal: Something's Not Right

Monday March 19, 2012 – Stewart Wolpin

So let me get this straight.

Wal-Mart expects consumers to box up their DVDs (making sure they were released by participating movie studios) and, if they have them, Blu-rays, schlep them down to a local superstore, wait for however long it takes, for someone to mark down the titles, fill out some online forms, and then charge you either $2 or $5 (for standard or high-definition) per disc they've already paid for so they can stream said movies to an Internet-connected device running the Vudu app.

And this made sense to someone? Am I missing something?

Plus, considering how paranoid Wal-Mart is about shoplifting, how exactly will consumers get out of the store carrying an armload of DVDs without being embarrassingly questioned?

But that's not even all of what seems to make no sense to me.

Not all movies have been digitized, and not all studios are represented. Many consumers will be schlepping half their discs to Wal-Mart and going through the whole process for nothing. That'll make 'em happy.

There is no Android Vudu app. Android smartphone users will have to steer to the Vudu Web site to view their movies.

The iOS Vudu app has been excoriated by downloaders who complain that it does everything as advertised except – wait for it – play movies.

Or, consumers can bypass the whole schlepping their entire DVD collection to Wal-Mart trauma and simply stream an HD movie to their portable device for the same $5 from Vudu. Or iTunes. Or CinemaNow.

Or they can pay $8 a month for Netflix and stream as many movies as they like.

Also, there are some consumers who download a DVD ripping program and create their own copy that can transfer to their portable device to be watched without that nasty Wi-Fi connection (of course we’re sure that these consumers are unaware of possible copyright violations).

But none of these even constitute the weird part.

David Bishop, president of Sony Pictures Home Entertainment, bragged in several reports on this "game changer" Wal-Mart-Vudu disc-to-digital deal that "It's not just about portable devices. You can watch your collection now on the TV."

Huh?

If a consumer is home, they'd fire up the Vudu app on their Internet-connected/Vudu-enabled Blu-ray player or smart TV (if they own one and it's connected to the Internet) to watch a streaming version of a movie – which they already own on DVD or Blu-ray from which that streaming version was made available from to begin with?

Either I'm missing something or my head is about to explode.

Boxee's Battle

Monday March 12, 2012 – Greg Scoblete

As we've noted before, "cord cutting" is more media myth (and marketing hype) than an actual phenomena but that doesn't mean the term is entirely useless. In fact, "cord cutting" is often portrayed in the tech press as a heroic act of defiance by consumers and small upstart firms challenging the Goliath of Big Cable.

It's a narrative that comes in handy, particularly when pleading your case to Federal regulators, as over-the-top set top box (STB) maker Boxee had a recent opportunity to do.

The Federal Communications Commission is contemplating a proposed rules change that would require analog basic cable signals to be digitized and encrypted. Currently, those basic channels (the same lineup you would receive over the air) travel into homes in an unencrypted form and can be viewed on TVs without a STB for free or a small fee. The cable companies want to change that, arguing that an encrypted signal will prevent piracy and, wait for it, save the environment: digital signals allow for remote diagnostics, which cable companies claim would result in fewer truck rolls and thus lower CO2 emissions (the energy-sapping set top box is conveniently left out of this eco-equation).

Yet encrypting those signals would eliminate the basic line-up of live television channels that Boxee intended to rely on for its "Live TV" dongle - an accessory to its Boxee Box Internet-connected set-top which adds live TV to its suite of Internet-delivered video content (the Live TV dongle also comes with a small antenna for over-the-air reception). In a blog post explaining his company's protest, Boxee CEO Avner Ronen spied an ulterior motive:

"Their real motivation is to prevent you from being able to connect the cable from the wall directly to your TV or Boxee Box. You will need to rent a set-top box from your cable provider, pay an extra $5-$15 per month and it will no longer work with your Boxee Box or similar devices... At Boxee, we’ve created an affordable alternative to cable that’s more in-tune with the way people watch TV today. The cable companies don’t like the idea of increased competition and in this case they are trying to get the government to help them block alternative devices such as the Boxee Box."

Ronen's outcry, however passionate, is complicated by a bit of inconvenient history: the cable industry began pushing back on the requirement to send unencrypted cable signals into homes in 2009 - a full year before the Boxee Box came into existence. Of course, it's fair to say that cable companies don't want increased competition (which business does?) and the opportunity to put basic cable channels out of Boxee's reach is probably an attractive bonus, but there's obviously more to it than that.

No matter how the FCC finally decides matters, this ruling is certainly one to watch. If the commission sides with the cable industry, it probably won't mean the death of Boxee (they'll stand or fall on other factors) but it will be a shot in the arm for set top box suppliers, who will be called on to fill newfound demand from those consumers who had enjoyed their boxless analog cable signals. 

Beware the Ides of iPad 3

Monday March 5, 2012 – Stewart Wolpin

Let the hoopla begin (I guess including here).

In less than two weeks, around the Ides of March, Caesar…er, I mean Apple, will start selling the iPad 3. Just the announcement of the iPad announcement sent shares of Apple stock soaring past the $535/share mark, and Apple's already world's highest market cap broke the half trillion dollar ceiling – $90-plus billion more than ExxonMobil. Holy app store!

It took just 15 years for Apple to go from practically bankrupt to becoming the world's most valuable company. And in just two years, BlackBerry’s smart phone market share has slid to – well, that light at the end of RIM's tunnel is an oncoming train from Cupertino.

According to Nielsen, in 4Q 2011, the once dominant BlackBerry sold just six% of all smartphones. At the end of January, RIM co-CEOs Mike Lazaridis and Jim Balsillie resigned. In the last month, two government agencies, the National Oceanic and Atmospheric Administration (NOAA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) have decided to shift from BlackBerry to iPhone, joining hundreds of corporate switchers. An Apple enterprise adoption trend is transforming into a tsunami.

What happened?

iPad happened.

No, not iPhone, not even Android.

iPad.

By the end of 2010 – the year iPad came out – BlackBerry's share had plummeted, while Android soared.

But I don't think the ascendance of Android – or even RIM's own technological sluggishness – is what condemned BlackBerry.

In little more than a year, iPad and iPad 2 were already seeing ferocious uptake in the enterprise markets. In mid-July 2011, Apple reported 86% of Fortune 500 companies were testing iPad.

iPad's corporate coup d'état was no accident. Out of public view, in the months leading up to the original iPad's introduction, Apple had carefully laid out a strategy for iPad in enterprise. Jobs & Company had learned an embarrassing lesson from Apple's corporate humiliation at the hands of IBM and MS-DOS, then Windows, a quarter century before.

One of Apple's primary problems in the 1980s was lack of vertical software. By the time Apple got around to addressing the corporate market, few software developers were willing to create specialized software for what had by then become a single digit percentage installed base.

Now, with iPad's and iPhone's half million apps, the vertical software shoe is on the other OS foot. And like Apple's obliviousness to IBM in the mid-1980s, RIM didn't recognize its app – and tablet – shortcoming until it was too late. No one expected iPad to be so successful and so no one was anywhere near prepared to react.

Apple's success with iPhone and iPad among corporate customers also is boosting Mac enterprise sales.

Apple's Mac success is immediately attributable to iPad's enterprise inroads.

As reported by Forbes, during its 4Q 2011 conference call in January, Apple CEO Tim Cook noted:

In the enterprise space, as an example, we've seen iPhones sort of be a catalyst, and the iPads moves after the iPhone. In several accounts, we've seen the Mac follow the iPhone. And so there are clear examples where one product has pulled the other in.

I don't disagree with Mr. Cook, but while iPhone introduced corporate users to iOS, I believe it was the iPad that sealed the deal. Further pushing the Apple ecosystem into enterprise is Cupertino's merging of its desktop and mobile operating systems, both now operating on an app model.

In short, Apple and iPad had out-enterprised former enterprise championship RIM. And around the Ides of March, the iPad 3 may deliver the corporate coup de grâce –

– at least to BlackBerry. With Microsoft similarly matching its new Windows 8 desktop OS with its Windows Phone OS, Apple may have renewed corporate competition.