Very useful chart over on the Verizon policy blog put together by Link Hoewing and Larry Plumb. Link uses it illustrate the changes we have seen over the past three decades in terms of Internet access platforms and speeds. It's too small to read here, so make sure to go there to see it more clearly and also see Link's interesting discussion.

Thursday morning's "OPEC 2.0" Op Ed in the New York Times by Columbia Law professor Tim Wu exhorts Americans to "face" their bandwidth addiction and explore alternative supplies of bandwidth "before it is too late." One may ask, too late for what? Are we really in imminent danger? As if characterizing the everyday use of broadband communications networks an "addiction" was not worrisome enough, Wu then analogizes bandwidth - what he defines as "the capacity to move information" - with oil and other finite energy sources - and paints a dark picture of today's largest bandwidth providers as greedy monopolists (or duopolists) controlling supply and "maintain[ing] price levels and extract[ing] maximum profit from their investments" similar to the OPEC oil ministers setting "production quotas to guarantee high prices." The problems with Wu's flawed analogies are explored in greater detail by my colleague Bret Swanson.

Having induced a degree of fear in the reader, Wu then introduces a note of hope for a better and alternative world in which one "future possibility is to buy your own fiber, the way you might buy a solar panel for your home." Perhaps. But what would this really mean? How many Americans really want to become their own "network managers," bear the responsibility for buying their own fiber, or install and maintain their network? And this is one of the least objectionable suggestions in his piece.

Global handset manufacturing giant Nokia has purchased the shares they didn't already own in Symbian, Ltd., the company formed in 1998 as a partnership among Ericsson, Nokia, Motorola and Psion and the developer of the Symbian mobile operating system, by far the world's leading OS for "smart mobile" phones with 67% of the market, followed by Microsoft on 13%, with RIM on 10% (source).

But wait, there's more (per Engadget)!

Here's where it gets interesting, though: rather than taking Symbian's intellectual private for Nokia's own benefit, the goods will be turned over to the Symbian Foundation, a nonprofit whose sole goal will be the advancement of the Symbian platform in its many flavors. Motorola and Sony Ericsson have signed up to contribute UIQ assets, while NTT DoCoMo (which uses Symbian-based wares in a number of its phones) will be donating code as well.

Other Symbian Foundation members include Texas Instruments, Vodafone, Samsung, LG, and AT&T (yep, the same AT&T that currently sells precisely one Symbian-based phone), so things could get interesting. The move clearly seems to be a preemptive strike against Google's Open Handset Alliance, LiMo, and other collaborative efforts forming around the globe with the goal of standardizing smartphone operating systems; the writing was on the wall, and Symbian didn't want to miss the train. Total cash outlay for the move will run Nokia roughly €264 million -- about $410 million in yankee currency.

Other reports note that the Symbian Foundation will eventually take Symbian open source, and that this move is as much as response to Apple's closed iPhone platform as it is to Gogole's open Android and LiMo platforms. (Although it is intriguing to note that AT&T, Apple's exclusive U.S. partner for the iPhone, is among the backers of the new Symbian Foundation, perhaps indicating that even AT&T is hedging its bets.)

The fact that we will soon see three open source platforms (counting Google's Android and LiMo) competing for market share provides yet another measure of the exceptionally high degree of competition in the wireless industry.

One should avoid clichés like the plague. But there is little in ecclesiastical wisdom that can match the old saw about there being no such thing as a free lunch. Goods and services come at a price. If a consumer wants to impress her friends with her high-end mobile phone, she had better be willing to part with cash sufficient to compensate the maker of that phone. A football fan with dreams of sampling all of the different games available each Sunday on DIRECTV should not be surprised to find that a good deal of equipment must be installed before he will ever see the first kickoff – equipment that DIRECT does not provide gratia placenti. Consumers must pay for what they would consume.

This simple truth appears to have been lost on a few “consumer advocates” who object to the imposition of early termination fees, or “ETFs,” when consumers cancel service contracts without having fulfilled the terms of their bargain. For, in fact, the use of service contracts and associated ETFs is merely a mechanism for spreading costs over an extended period rather than requiring consumers to bear them in the form of a one-time fee.

To extend the examples above, smartphone and DBS service both require consumers to have fairly sophisticated end-user equipment. If one were simply to purchase a high-end mobile device, the retail price would run into the several hundreds of dollars. Similarly, the need for a parabolic antenna, set-top box, and the labor for installation required to receive DBS service suggest a substantial upfront consumer investment before any actual service can be received.

Service contracts and ETFs provide an alternative. A smartphone that may have cost our hypothetical consumer $500 had she purchased it as a stand-alone device might be provided for only a few dollars in conjunction with a one-year commitment to a particular carrier’s service – allowing the carrier to recover the full cost of that smartphone over the period of the contract. Rather than pay DIRECTV an initial equipment and installation charge of several hundred dollars, our football fan can instead amortize those costs over a year or more in conjunction with a service contract. Naturally, however, to the extent a consumer wants to opt out of any such contract, he or she should reasonably expect the affected service provider to demand recompense for the upfront investment necessary to provide service.

The National Center for Health Statistics, part of the Center for Disease Control, recently released some new data on wireless substitution collected from a survey conducted in the second half of last year. The report notes that:

Preliminary results from the July-December 2007 National Health Interview Survey (NHIS) indicate that nearly one out of every six American homes (15.8%) had only wireless telephones during the second half of 2007. In addition, more than one out of every eight American homes (13.1%) received all or almost all calls on wireless telephones despite having a landline telephone in the home.

I found it interesting how the report broke out that latter group of "wireless-mostly households" since that's the group I'm in. My wife and I keep a landline (1) for emergency purposes, and (2) as the equivalent of a spam line that we can give out to people who demand a phone number but who we never want to talk to again! Anyway, I think these numbers make it clear that, in a few years time, the majority of Americans are likely to be wireless-only or wireless-mostly homes and wireline systems will grow less and less important.

Update: Jason Fry of the Wall Street Journal explores what these numbers mean in his entertaining column today, "The Landline That Refused to Leave." And his colleague Carl Bialik, who pens the always-brilliant "Numbers Guy" column for the Journal also sounded off on this.

Barbara Esbin and I have just released a short PFF essay asking the question: "Where is the FCC's Annual Video Competition Report?" The FCC is required to produce this report annually and yet the last one is well over a year past due and the data is contains will be over two years old by the time it comes out. I've embedded our paper about this below.

Kyle McSlarrow of NCTA this morning hosted a teleconference on network management practices. He made a number of good points about the costs of archaic regulatory requirements, the near ubiquity of cable high-speed services, the work that is being done to build faster and better broadband networks, and the need for sensible, balanced, and equitable customer service disclosures. I can do little to add to the force of those points and won’t endeavor to try.

More importantly from my perspective, though, is that Mr. McSlarrow added color and line to a vision of the future that is hazy shades of gray for most of us. As he pointed out, the broadband market is yet in its infancy. It is the offspring of diverse experimentation, and it shall grow only through more, and varied, experimentation. Like Walt Whitman putting the chuff of one hand on our hip and gesturing with the other to the vast unknown landscapes before us, Mr. McSlarrow rightly cautioned against taking our ease with what we know today – today’s technologies, today’s protocols, today’s data sharing applications, today’s networks or services.

For tomorrow will turn upon technologies, networks, applications, and protocols that, in 2008, are nothing more than mysterious phantoms of ideas. And the speed of innovation is, if anything, increasing. We may well, in very short order, and assuming the government doesn’t freeze technology into place with misguided regulations or unnecessary limits on innovative new business models, all interact with technologies in ways that would seem completely foreign now.

And therein lives the magic of ingenious engineering, creative marketing, and courageous entrepreneurship. The vast, unknowable landscape of tomorrow can only be discovered by leaving the market free to explore where it will. “Here are bisquits to eat and here is milk to drink, but as soon as you sleep and renew yourself in sweet clothes, I kiss you with a good-by kiss and open the gate for your egress hence.”

Mr. McSlarrow today showed us the open gate to the future.

Predictably, Google and Amazon issued press statements yesterday supporting legislation offered by Reps. Ed Markey (D. Mass.) and Chip Pickering (R. Miss.) that would lay the groundwork for government regulation of broadband network operations. Their theory, apparently, is that network operators have too much power and that they may, as “gatekeepers,” unreasonably discriminate against certain kinds of content or applications.

What is the old saying about glass houses? As we and others have pointed out on numerous occasions, the “market power” of broadband network operators is overstated. There is scant evidence that unreasonable discrimination has occurred in the past and no credible argument that it is likely to occur in the future. Indeed, the instances of network discrimination that have achieved the greatest reclame, including the recent case involving the slowing of certain P2P applications, have in fact been nothing more than efforts by network operators to manage Internet traffic efficiently for the benefit of all customers.

More importantly, though, once government regulators start making inquiries into the potential aggregation of market power that might hamper the future growth and development of the Internet, they likely will not stop at the network level. Today, the applications layer of the Internet is dominated by very large companies that are getting larger. Those companies have achieved their scope and heft though free and fair competition, and they should be applauded for their success. But once the principle of minimal Internet regulation has been cast aside, the proponents of the Markey/Pickering legislation may find themselves in the crosshairs of regulators. Government-managed competition at any level of the Internet should not be a welcome advent.

Cable and telecom operators have long fought like cats and dogs in the political marketplace. And now that they are competing more intensely for customers in the real marketplace, we can expect relations between the two camps to grow even more acrimonious inside the Beltway.

Case in point: Yesterday, cable operators Bright House, Comcast, and Time Warner filed a complaint at the Federal Communications Commission (FCC) alleging that telecom giant Verizon has been offering “unlawful inducements to customers” in an effort to retain those customers looking to switch over to cable-based voice offerings. The cable companies want to FCC to force Verizon to halt those “winback” tactics which take place before a customer switches over. And the cable operators also want the FCC to award damages based on past harm supposedly done to them.

It’s an example of just how cut-throat the marketplace competition has become between the two sectors recently. As Cynthia Brumfield of IP Democracy points out, telecom operators have been hemorrhaging customers in recent years and cable operators have been the primary recipient of those telco-defectors. As Cynthia notes:

Stacking the Deck in the D-Block Auction Never was a Good Idea

If bidding in the upcoming FCC 700 MHz auction can be likened to placing bets in a game of Texas Hold ‘em, a player for whom the deck appeared to be stacked just cashed-out and walked away, mid-hand. As has been widely reported, FrontLine Wireless announced on January 8th that it is “closed for business,” reportedly because it was unable to attract sufficient investment.

FrontLine had been expected to be one of the leading bidders for a license in the D block spectrum, which will come with strings such as requiring joint public-safety use, nationwide geographic coverage and a public safety veto over what could and could not go on the network. Indeed, the very existence of Frontline hinged on winning the D-block, and the company had worked closely with the FCC on crafting a set of rules for the spectrum that were all but tailor-made for Frontline’s business plan. Nonetheless, even with the deck effectively stacked in its favor, the market was not willing to bankroll FrontLine’s play.

FrontLine’s announcement that it has folded should come as no surprise. Far from being an occasion for mourning, however, the foundering of FrontLine hopefully signals the end of what has been a tragically flawed experiment in the D-block from the outset.