Time to stand up for freedom on the web – what Skype is saying about the open internet

Jean-Jacques Sahel, Skype’s European Director of Government & Regulatory Affairs, has caused something of a stir around network operators looking to charge internet companies for using the web... here is what he is saying:

You’ll be forgiven if you missed a rising stir in recent weeks about freedom and choice on the Internet as it becomes something used on mobile devices.

In essence the French and EU authorities are havingformal consultations around the open Internet. We’ve long talked about this and share many of the same views asNeelie Kroes, the EU commissioner for the Information Society, and her predecessor Vivian Reding: that EU regulations should (and now do) protect net neutrality and net freedoms.

What’s worrying us is that some very large telecom companies are starting to say Internet, especially when accessed with mobile devices, is a drain on their networks and they want to charge Internet companies fees to run its data on “their” network.

As we’ve made some major steps to bring Skype to mobile users recently you’d expect we object to that. And we do. Here’s why:

The first point is that not ‘their’ network - the Internet does not belong to anyone – it has grown thanks to more than 40,000 networks voluntarily interconnecting to form an open, decentralised network of networks. The operators making the complaints right now only carry the data for a small part of its journey around the web. The rest of the Internet ecosystem is based on a successful business model that does not and never had such subsidising of infrastructure companies by content providers. Should water companies be allowed to charge garden centres, pasta makers and coffee producers for encouraging demand for water consumption?

Second, and we think more worrying, is that this idea of charging online companies threatens the very innovation that will drive people and businesses to start using the Internet on their mobile device. In Europe and across the world there are teams of software developers creating apps and services that will drive demand for data plans sold by operators. These are not get-rich-quick-teenagers making millions of dollars every day. They are hard working small and mid-sized companies that are fighting for survival in a tough environment.


Alongside these heroes of the (mobile) Internet are thousands upon thousands of companies, big and small, who rely on the Internet to distribute their goods and services.

It is an affront to ask all these engines of economic growth to pay a fee to large multinational telecommunication companies.

The last point to stress is that mobile customers are already paying operators for Internet access. There has been a big increase in sales of data plans, thanks only to the appeal of all kinds of online content, services and applications like Skype, Wikipedia, Spotify, or Facebook. Innovative content and app developers are the raison d’être for the mobile Internet. Without them operators would not sell a single data plan. Smart operators like 3 in the UK get this and it is proving to be a successful business for them.

At the other extreme, we are baffled to see that many of the operators that supposedly ‘allow’ VoIP on mobile at last, such as Orange in France, actually reserve the use of VoIP only to those consumers with the most expensive packages, or require payment of a VoIP-specific prohibitive charge in addition to a user’s basic ‘Internet’ fee, which seems to imply a double-payment by consumers for their Internet use. That’s not the way to ensure rising consumer demand for mobile Internet packages and customer satisfaction, but a sure way to kill off European SMEs by making it artificially difficult and expensive to use their innovative content and apps.

We should be encouraging entrepreneurs and innovators so that Europe can be globally competitive, with high and rewarding employment. It makes no sense to threaten an entire ecosystem with artificial barriers and a (private!) tax affecting innovation and entrepreneurship.

If you agree it’s important to join us in putting this case to the regulators. Here are the links to the French government consultation (PDF): Discussions are also heating up in the Netherlands where the draft revised telecoms laws put forward by the outgoing government do not contain a clear principle protecting net neutrality apparently. Please subscribe to this blog (links to the right) if you want to hear more on this and we’ll send through details of the EU consultation when it starts so you can express your views and help protect the open Internet in Europe and ensure jobs and innovation are fostered and protected.

Apple all set for mobile payments? Read the patent application abstracts and decide for yourselves

A series of patent applications in the US field by Apple point to the company exploding into the mobile payments, mobile couponing, NFC and mobile advertising markets in a big way. Together, the patent applications describe a comprehensive end-to-end mobile payments, mobile retailing and mobile marketing service that would put Apple at the centre of a major new mobile commerce business — and provide clear evidence that the company has a solid business plan in place for the introduction of NFC services.

Here are the patent application abstracts for your delictation.

The abstract for the Smart Menu Options application explains that it primarily covers methods for choosing which payment option to use at the point of purchase:

Systems and methods are provided that allow for a portable electronic device to provide smart menus to a user based on a context of a transaction. Specifically, the method of using a portable electronic device may include opening a near field communication (NFC) channel with a point-of-purchase device and providing a smart menu based on a determined context.

The portable electronic device may be configured to determine the context based at least in part upon acquiring sales transaction information for the point-of-purchase device. Additionally, the portable electronic device may be configured to determine the context based at least in part upon acquiring vendor identification information.

The concept of a data manager, a manufacturer database, retailer database and consumer database are introduced alongside the concept of fees being charged to retailers and product suppliers by "the manufacturer of the device" for the delivery of coupons and other promotional services to consumers:

The manufacturer database may hold information such as brand name, model number, serial number, UPC code, product types or classifications, product descriptions, suggested retail prices, stores where the product may be available, a media file regarding the product, a web page address for obtaining more information about the product or purchasing the product, among other things. Furthermore, a manufacturer may chose to add information such as coupons, promotions and the like on a fee basis that may be taken into consideration by the device as part of the context of a particular transaction. The coupons and incentives may result in the affect the order (sic) in which payment options are presented or suggested to a user.

The data manager may also be coupled to a retailer database which may hold retailer specific product information. As with the manufacturer database, the retailer database may hold information that pertains to the products. Additionally, the retailer database may contain information relating to accepted forms of payment, preferred payment options (for which there may be an incentive for a user to use the preferred payment option), coupons and incentive information, among other things. The information contained in the retailer database may similarly affect the determination by the device of preferred payment methods. In some embodiments, a retailer may pay a fee to the manufacturer of the device, for example, to be included in the retailer database or to be able to modify the information in the retailer database to reflect current information.

In some embodiments, both the manufacturer database and the retailer database may contain advertisements that may be sent to the electronic device in response to the information request packet. The advertisements may either be presented directly to the user through sensory media reproducible by the device or indirectly by influencing the determination of suggested payment options. The advertisements may include promotional material related to the purchase of a product and/or marketing partners. For example, the promotional material may provide incentives to a consumer for purchasing the product using a particular payment method. Alternatively, the promotional material may provide incentives, such as a discount, for example, if the purchase of the product is combined with the purchase of another product from the manufacturer or from a manufacturer's partner.

The data manager may also be communicatively coupled to a consumer database which may hold information related to the user of the electronic device. For example, the consumer database may include a preference profile of the user of the electronic device. The preference profile may include such information as specific retailers that the user prefers and/or specific modes of payment and products that the user prefers. The consumer database may also include information relating to terms such as interest rates for payment options available to a user. Additionally, the database may be populated based on information exchanges between the data manger and the electronic device which may indicate the shopping habits of the user. Additionally, the consumer database may also be populated by personal preferences identified by the user, an embodiment of which is described in relation to FIG. 19. In other embodiments, the information contained in the consumer database may also be included in the memory of the electronic device.

The abstract for the Real-Time Bargain Hunting patent application, meanwhile, provides details of a comprehensive mobile shopping system, again including the 'iCoupons' concept:

Systems and methods for providing shopping-related information to a consumer are provided. Embodiments of the system provide a consumer with shopping-related information, such as pricing information, product quality, consumer ratings, and other information that may help a consumer make an informed purchasing decision. Other embodiments allow a consumer to obtain and compare retail prices offered by several retailers for a specified product. Still other embodiments allow a seller to send targeted product information to a consumer who has indicated an interest in purchasing a specific product.

Further details on how Apple would generate fees from the provision of the manufacturer, retailer and consumer databases are then provided, along with details of how a consumers' shopping habits could be used to automatically identify the kinds of promotional offers they would be interested in:

In some embodiments, both the manufacturer database and the retailer database may contain advertisements that may be sent to the electronic device in response to the information request packet. Such advertisements may include product related data, and/or media files such as picture, video, and audio files.

The data manager may also be communicatively coupled to a consumer database which may hold information related to the user of the electronic device. For example, the consumer database may include a preference profile of the user of the electronic device. The preference profile may include such information as specific retailers that the user prefers and/or specific brands of products that the user prefers.

The consumer database may be populated based on information exchanges between the data manger and the electronic device which may indicate the shopping habits of the user. Additionally, the consumer database may also be populated by personal preferences identified by the user, an embodiment of which is described in relation to FIG. 5. In other embodiments, the information contained in the consumer database may also included in the memory of the electronic device itself.

In some embodiments, the data manager and the databases may be a part of a system owned and operated by a single entity, such as a manufacturer of the handheld electronic device. In this embodiment, the operator may populate the manufacturer database and the retailer database with information provided to the operator by various product manufacturers and retailers in exchange for a fee.

GUEST BLOG: 4G – the flavour of the month

A guest blog by Ned Taleb, CEO, Nexius

The first quarter of 2010 has just come to an end and a colleague at Nexius recently asked me what seems to be the hot topic with our operator customers and the technology press and analysts this year. My simple answer: 4G.

From Apple previewing the 4th generation of its revolutionary iPhone today to operators racing to launch their 4th generation networks, 4G is the marketing term of the moment.

At CTIA Wireless in March, I saw 4G news everywhere. Every major US wireless operator spoke about their 4G plans at the show:

·         Verizon said they expect to roll out LTE in nearly 30 markets to cover 1/3 of all Americans by the end of 2010. The biggest LTE rollout and the first to market in the US.

·         Not to be outdone, however, AT&T announced that their 4G vendor trials are underway and that they plan to begin commercial rollout early in 2011.

·         While, T-Mobile didn’t dive deep into 4G but they did announce plans to make a faster HSPA+ network available in markets that serve 180 million people by the end of the year. Since HSPA+ is backwards compatible with T-Mobile’s current 3G technology its customers can continue to use their existing handsets to enjoy considerably faster network speeds.

·         Sprint made perhaps the biggest 4G news at the show showcasing America’s first 4G smartphone, the HTC EVO 4G, which they will launch on the Clearwire WiMAX network. Sprint CEO, Dan Hesse, said in his address “"LTE will be the larger of the two standards, but we couldn't wait. We have enough spectrum that we could add other techs later."LTE will be the larger of the two standards, but we couldn't wait. We have enough spectrum that we could add other techs later."LTE will be the larger of the two standards, but we couldn't wait. We have enough spectrum that we can add other technologies later."

·         Even MetroPCS, a smaller operator, announced that it will launch its 4G LTE service in the second half of 2010. They are also working with Samsung to launch the first LTE handset, the SCH-r900, on their network later this year.

But it isn’t just operators and Apple talking 4G. Even Avatar director, James Cameron, recently jumped on the 4G bandwagon by pointing out that faster 4G networks would be the key to delivering 3-D applications on the phone. (To be precise, he actually said faster “G4” networks would be the key…but he makes movies, not cell phones.  His audience is Generation-X, Generation-Y, and beyond. He cares not for the enabling technology platforms but what they can do to bring media such as “Avatar” into the palm of the next generation of audience. So G4 it is, in as far as it really matters to our clients and customers. :-) )

Clearly 2010 is all about speed: 1.) Getting to market quickly. 2.) Launching faster networks and faster devices. 3.) Delivering content to consumers at the speeds they demand. It really does not matter which 4G wireless operators deploy, be it WiMAX in the interim or LTE in the longer term, the objective is the same: to enable the realization of the future of wireless services and applications. Everyone from wireless operators to Apple to James Cameron want to deliver these services by uniting the best technology platforms with the fastest networks and the next generation of smart devices.

We feel fortunate that Nexius has had the opportunity to work with so many of these leading companies to develop their 4G network rollout strategies as well as create, deploy, and integrate the services and applications that these networks enable. It’s great to be at the center of such fast-paced innovation. Only time will tell who wins this battle for 4G dominance. Let’s check back at CTIA 2011 to find out.