pipes

Virgin puts legal P2P plans on ice

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Big label pressure has forced British cable ISP Virgin Media to suspend plans to introduce a legal music sharing service for its subscribers, just weeks ahead of its launch, The Register has learned.

The radical initiative, tentatively branded as “Virgin Music Unlimited”, represented a major investment for the ISP, and would have been the first such attempt to monetise P2P file sharing in an ISP partnership in either Europe or the USA. However, 11th hour “anti-piracy” demands by major record labels including Universal Music and Sony Music meant Virgin could no longer launch the service as it had envisaged. Labels demanded that Virgin block uploads and downloads of songs from subscribers’ PCs, sources suggest. Since the system is designed to encourage file sharing, the demand removed the service’s USP.

Virgin is believed to be particularly disappointed at the collapse of the initiative. The ISP had been the first to co-operate with the music business-ISP Memorandum of Understanding (MoU) signed last July and send warning letters to file sharers. It had also made a significant investment in the Music Unlimited initiative, estimated at eight figures.

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Net refuseniks are getting more stubborn

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Almost half the nation’s households don’t have net access – and most of them aren’t going to sign up.

In what will be unwelcome news for ISPs, ecommerce providers, and the government, a survey of UK households suggests internet hold-outs are getting more stubborn.

The availability of cheap broadband has eroded the refusenik camp very slightly, with 3.6 per cent of non-net households signing up over six months. However, the increase in broadband is largely at the expense of dial-up, and isn’t winning net converts. The number of households with no access fell by 1.6 per cent year-on-year from the previous survey, while broadband uptake rose 7.1 per cent.

Overall, 44 per cent of UK households don’t have net access and views are becoming more entrenched.

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How the iPhone puts a bomb under mobile networks

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If you think everything that could have been written about the iPhone already has been written, prepare to be surprised. One vital aspect of Apple’s strategy has been overlooked – with multi-billion consequences for complacent network operators. Over at Telco 2.0, the blog of analysts STL Partners, we learn that networks who partner with Apple … Read more

EU plans to regulate online niceness (and ISPs)

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Europe’s most powerful quango, the European Commission, says it wants to accelerate a “single market” for online music, film, and games – and is threatening legislation to bring it about. Although the EU’s Telecoms commissioner Viviane Reding sees the market for digital entertainment quadrupling (to €8.3bn by 2010), she feels the bureaucrats need to get involved anyway.

In a statement issued yesterday, the EC identified four areas for action – with the most ominous being a good behaviour pledge for online service providers.

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Obama mounts ‘Neutrality’ bandwaggon

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Politicians long ago gave up on politics. Instead of articulating great ideas, the choice that faces voters today is between identikit managerial bureaucrats who’ve never had a job outside politics. Most of their adult lives have been spent in the hermetic world of wonkdom. So it’s little wonder, then, that they have trouble distinguishing between fiction and reality.

And it’s no surprise at all to hear that a virtual Presidential candidate is throwing his electrons behind a virtual cause, to repeal a virtual law that never existed.

What else would a cypher do?

Asked whether he’d “re-instate Net Neutrality” as “the Law of the Land”, trailing Presidential Candidate Barack Obama told an audience in Cedar Rapids, Iowa pledged that yes, he would.

He also said he’d protect Ewok villages everywhere, and hoped that Tony Soprano had survived the non-existent bloodbath at the conclusion of The Sopranos.

(So we made the last two up – but they wouldn’t have been any more silly than what the Presidential Candidate really said.)

There are several problems with Obama’s pledge.

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VoIP is Dead. It’s just another feature, now

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Business-wise, Skype is a basketcase. But that’s just one of the things that makes it one of the most emblematic companies of our time – a real, Ur-Web 2.0 company.

Like so many internet companies, Skype has millions and millions of users. Like these internet companies, too, it can’t make very much money off all these users. Hello, Facebook! And like these internet pin-ups, it owes a great deal to utopian power fantasies.

But what makes Skype so very of its time is the peculiar relationship it has with incumbent telecomms companies.

Think of Skype as a kind of parasitic virus that threatens to bring the host to its knees – but which can’t survive without a living host. Bloggers and mainstream newspapers are another good example.

How so?

Well, Skype has no network of its own – it’s simply an open protocol (SIP is more than one protocol, but bear with me) wrapped up in some proprietary bits. Apart from a few authentication servers, its only real asset is its “brand” – which isn’t the most concrete or tangible line item to have on your balance sheet.

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Nokia: Don’t bet the house on content

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At times you can feel sorry for Nokia. The company is damned when it dares to plan for the future, and it’s damned if it doesn’t.

But that illustrates the depth of its dilemma. Today, Nokia is phenomenally successful in one business – handsets – which generates £27bn ($54bn) a year, with a margin of between 15 to 20 per cent.

However, Nokia relies on a small number of powerful customers as its route to market. This isn’t a problem for every business. If you sell fighter aircraft, you know who your handful of customers are, and can schmooze them directly. If you sell bangles from a market stall, you can choose which market you sell from. Nokia doesn’t have the luxury of either: its channel is its market.

And “getting from here to there” is the problem.

At great expense last week, Nokia began to imagine itself as a very different kind of company: a vertically integrated services business. Mobile users would flock to the company’s new portal, Ovi, for games, music, information and “social” interaction. You might call this a “post-operator” world, but it’s also a “post-Nokia” world, as it presumes that both data and devices are commoditised. It’s a Plan B.

However, the strategy takes today’s complex mobile data eco-system and promises to torch it. Today, there’s room for a Real Networks selling games or ringtones, for example, or an AQA providing an answers service. Nokia’s Ovi portal effectively declares war on all these smaller service providers. That can be considered bad manners (or a business necessity) – but it isn’t fatal to Nokia’s plans. It’s the biggest, would-be service companies who are the most threatened.

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Can Big Telco do Perestroika?

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While the CTIA Wireless jamboree took place in Florida this week, European telcos were drawn in a huddle in London at one of the most intriguing events of the telecoms calendar.

The theme at STL’s twice-yearly Telco 2.0 Brainstorm is familiar: “How to making money in an IP-based world”. But it has an added piquancy now.

And there’s plenty at stake. The part of AT&T formerly known as Cingular, the cellular division, makes more revenue than Google and Intel combined each quarter. But as with all mobile network operators, it’s been made from a large, vertically integrated operation, and a fiercely-protected, closed network. The rise of the Internet Protocol stack (IP) changes all that.

IP evangelists can be pretty scathing: IP will destroy the Soviet model; their “Net heads” will triumph over “Bell heads”. At stake, they say, is a battle which pits innovation versus atrophy. Unlike the open internet, telecomms provide a barrier to fledgling service providers or application developers. There’s no common API, and the service companies need to beg permission.

But there are other ways of looking at it.

Mobile telephony – at least in Europe and Asia – is the most successful application of technology since the combustion engine. It’s affordable to the poorest, but it feeds the id of the wealthiest fashion victims. Take up is almost 100 per cent – while internet adoption is stubbornly stalled at around 60 to 70 per cent of the Western population, and is seen as little more than a platform for games in much of the world. While mobile operators take a tax from almost all of us, very few of us (outside the US, at least) seem to resent this. And it’s perceived as reliable. Rich or poor, drunk or sober – when you push a button, the call gets through. When you send a message, you know it gets delivered. Imagine if that simplicity and efficiency was applied to your local tax rebate bureaucracy – or the financial services industry. And mobile telephony gets cheaper and better every year.

Yet this success story is under direct attack from a very American model of how business should work. This is a model which values abstractions over outcome.

To give you an example of what I mean, this week, I heard more than one person seriously endorse the idea that mobile phones should have two ‘send buttons’ (that’s the green button ‘call’ on every handset) so we could engage in “dynamic differential pricing”. This would delight American economists, but I found myself thinking how I could explain this innovation to a new user down the pub.

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