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.

Multiparty chat coming back – hmmmmm

Thanks to internet chatrooms, PhonepayPlus is looking again at re-introducing multiparty chat services – ideally with less onerous prior permission and maximum spending caps than it did in 2002 – as it now perceives consumers to be safe to use them.

The services were effectively banned in 2000 because PP (or ICSTIS as it was back then) believed that consumers were too easily addicted to such services and were over-spending. Now, just a decade later, PPP believes that people are so used to internet chat rooms that they can handle multi-party chat once again – which is good of them.

PPP now believes that with the right maximum spending caps and other safe guards, that services can be run. And it wants you, the telemedia industry, to tell it how best to get these dormant services back up and running.

The interesting thing here is that why would anyone now want to run multiparty chat services since, by PPP’s own admission, most people who want to do this kind of thing are doing it largely for free in chatrooms online? Or via the many IM based services now in place? Or the myriad mobile and mobile video services now successfully running? I could go on…

Could this be a case of consumer self-regulation? Is PPP deciding to open up a once profitable service now that it knows that most consumers won’t use it?

That said, the telemedia industry is always good at grabbing an opportunity, so I look forward to seeing more multiparty chat services, via the telephone, hitting the streets in, oh, 2015 once the consultation period has run its course.

If I were to be charitable I could say that PPP is trying to offer some help to the industry in a time of crisis; offering up the possibility of some of the services from the good old days now making a reappearance because consumers are more sophisticated.

But, with virtual chat services effectively being closed down with PPP’s other hand, the cynic in me tends to win out. This is perhaps being reintroduced because no one will bother to use it.

Anyway, the proposal is out there, so go consult.

Everything changes: consolidation begins and The Thunderer starts to charge online

Happy days for MX Telecom’s Mark Fitzgerald, who sold the company to Amdocs this week for $104million in cash. Industry consolidation in action there I think you’ll agree. Whether the giant US company will ‘spoil’ good ole MX remains to be seen, but the two businesses are a pretty good fit: MX brings a good deal of European mobile payments experience to Amdoc’s OpenMarket, a nascent mobile payments hub in the US. In return, MX finally gets the traction in the US market that it has been striving for over the past few months. As I say, nice fit.

Not such happy days, however, for news consumers as Rupert Murdoch’s News Corp. announces today that it will start charging for online news content from June – just in time for WORLD TELEMEDIA MALTA (9-11 June). So he finally did it. Users will be charged £1 for a days access and £2 for a week’s worth of right of centre, Murdoch-friendly scribing. The company also hinted that leading tabloid titles the News of the World and The Sun would follow suit.

The company is buoyed by the fact that online ABC figures are up to 1.22million daily browsers. Watch this plummet when the charges come in to force. Whether the decline will be long term remains to be seen. While there are obvious advantages for the telemedia sector around charging for online and mobile media content, experts are still divided over whether consumers will actually pay for the news online in this way.

Some believe that someone with Murdoch’s business nous won’t have done this without knowing it will work, while others – the younger end of the media watching media, it has to be said – insist that old man Rupert just doesn’t get the web and is trying to impose old print business models on the new world order. I guess we will, from about August onwards, find out who was right.

ISSUES AROUND CHARGING FOR ONLINE MEDIA CONTENT WILL BE EXTENSIVELY COVERED AT WORLD TELEMEDIA MATLA 9-11 JUNE, CLICK HERE TO REGISTER

Operator billing gets a boost as tech firms step in to make on-bill billing better

While much attention has been focused of late on alternative billing tools that seek to circumvent operator billing – as much for easy of use among consumers as to avoid the ENORMOUS cut the networks take – it seems that some very big names out there are looking at trying to redress the balance.

Leading suppliers of high end billing kit to operators are lining up in the build up to next week’s Mobile World Congress in Barcelona to offer network operators better ways of using their billing platforms to cope with on-bill billing, especially as the consumer market goes apps crazy and media companies attempt to start charging for content.

Last week we reported on our newsite www.telemedia-news.com that mobile roaming billing hub MACH is set to revolutionise content and app billing by leveraging its expertise with roaming settlement amongst two thirds of the world’s operators into delivering one click on-bill billing to MNOs (more of which a little further on).

Now leading suppliers Nuance and Vesta in the US have joined forces to co-promote and integrate Nuance’s Mobile Care application with Vesta’s Mobile Payment Platform, to deliver a comprehensive payment service to mobile operators worldwide.

Network operators it seems are, all of a sudden, taking their billing much more seriously. The Nuance-Vest story highlights how more than 50% of calls to MNOs from customers relate to billing issues and the two companies are looking to work together to basically tidy up the chaotic, often highly silo-ed, web of operator billing platforms.

Nuance and Vesta are looking to help MNOs automated and secure the entire payments process so that consumers can really start to use their handsets to pay for things.

As a result of this collaborative offering, mobile operators will now have the ability to provide a comprehensive and secure self-service experience to consumers via the mobile channel.  Consumer research indicates that nearly a quarter of all mobile customers, and nearly a third of the youth market, prefer to pay through their handsets. Mobile consumers like the convenience and flexibility that mobile payments deliver.

While this is interesting from the mobile payments point of view, the MACH story is of extreme importance to the telemedia community. As we reported last week, MACH is looking to leverage IP billing to actually deliver something that will help consumers and networks alike: one click operator billing.

“To date anyone who is trying to sell apps, mobile content or mobile web services has only had operator billing, PSMS, PWAP and IVR to use and these are relatively cumbersome messaging tools, not payment and settlement tools,” explains Bernadette Lyons, MD of MACH’s mobile applications and content billing arm. “Consumers, developers and network operators all want a much more simple and easy way to pay and to settle payments for these services – and that is what we are offering.”

The service, which is likely to be rolled out across a number of yet to be named apps stores by the summer, offers a simple way to bill for apps, and to deliver in-app billing, says Lyons.

And everyone has to gain from it. Consumers get an easier way to consume, apps developers and apps stores get a simple and trusted way to pay and network operators get direct billing from which they can take a cut. It also removes cross border price point issues too, she says.

“It finally brings proper IP billing to the market,” she adds. “The mobile content market had plateaued before apps came along because getting content and paying for it was so cumbersome. Apps have made that more attractive and easier for users and we hope our direct billing will make it really take off.”

While still to be rolled out and seen in action, in theory what MACH is looking to do could seriously shake up the billing space. Sure, there will always be a place for alt.billing for using PSMS and so on to pay for stuff online, and credit card on the fly and so on, but if MNOs buy in to what MACH is offering it gives them a tool that they really can start to market to consumers as an easy and trusted way to start using their phone bills as a payment mechanic.

This could put back in place the reliance by telemedia companies, services providers and everyone else in the value chain on operator billing – and that means back to operators calling the shots on outpayments, tariffs and what you can and can’t sell.

Equally though, it also means that Payforit3.0’s launch next month could be even more of a damp squib than it was shaping up to be. If operators buy in to the idea of a simple one-click, on-bill payment, then they have even less incentive to market and get behind Payforit. Will many in the telemedia industry looking at ditching as much operator billing as possible, this could final see Payforit railroaded into the sidings.

As I write no operators would come out of their glass offices to discuss MACH’s offering, but I suspect we may hear a lot more about it post-Barcelona. I certainly will be on the case at the show and hope to have some interesting stories to tell about billing in the coming weeks. Who knows, this time next year we may be looking at a very different billing landscape?

GUEST BLOG: How America went text mad to donate to Haiti

By Bob Bentz, president of Advanced Telecom Services
When it comes to disaster relief for earthquake victims in Haiti, Americans are phoning it in at a record pace. As of Tuesday, January 19, more than $27 million had been donated to the Red Cross thanks to a simple text message that Americans have embraced like none other that has come before it—Text HAITI to 90999.  When a consumer sends a text message for Haiti, his cell phone bill incurs a $10 charge.  This is certainly much easier and more spontaneous than putting a check in the mail.

And, it hasn’t stopped there.  The Red Cross is still accepting text message donations for Haiti so it’s impossible to know where it will all end.  The Red Cross has acknowledged just how important the text message donation program has been; 20% of its entire donations for Haiti have been received via text message in the United States.

The Haiti earthquake relief program operated by the Red Cross has far surpassed any previous use of premium SMS technology for making text message donations.  Thanks to a bevy of announcements by celebrities and first lady Michelle Obama in popular shows like 24 and the National Football League playoff games, the text for Haiti program has been a smashing success.  In fact, Red Cross officials confirmed that it was receiving a half million dollars worth of donations via text message per hour during the NFL playoffs.

President and Mrs Obama visited Red Cross headquarters in Washington earlier this week and discussed the premium SMS program. It was actually the Obama administration that first recommended text message donations as a fundraising tool for the Red Cross.  The Obama administration should know a thing or two about the power of mobile marketing—text message marketing played a vital role in Obama’s march to the White House in the 2008 election.

While President Obama’s use of mobile marketing was unprecedented in terms of the political arena, the amount earned by the Red Cross is beyond unprecedented.  “I need a better word than ‘unprecedented’ to describe what’s happened with the text message program,” said Roger Lowe, of the Red Cross.

The amount raised by the Haiti earthquake premium SMS campaign shows just how far text messages and premium SMS has come in America.  Following Hurricane Katrina in 2005, for example, a similar text message donation program raised just $250,000.

Premium SMS, however, is more than just a convenient way to make a non-profit donation.  You are most likely familiar with premium SMS from television shows like ‘Deal or No Deal’ which allows viewers to participate in the television program from home.  Perhaps, you have also seen some late night advertisements that enable you to purchase cell phone ringtones or receive horoscopes by paying via a premium SMS program.

There are the typical applications like horoscopes, TV newscast voting, and sports handicapping picks that can be used by premium SMS.  Many of these applications were the early money makers twenty years ago when 900 numbers provided an equally convenient billing mechanism to the landline phone.  There are also newer applications like internet access and computer technical support.

If you have information that you want to sell to the 270 million cell phone users in the United States, here’s how premium SMS works.

First, you need to contact a mobile marketing service bureau to provide you with the premium SMS short code.  The short code is the abbreviated phone number that is used for mobile marketing programs.  You will also need to secure a keyword with that short code.  In the case of the earthquake relief program, “HAITI” is the keyword and “90999” is the short code.

You can choose a price from as low as .10 per text message to $10.00.  In general, the carriers take 45% of the price of the text message.  Most service bureaus will remit 50-70% of the net proceeds after the carrier’s share to the sponsor of the program.   Expect to pay a fee to start the service and a monthly fee too.  You will obtain your share of the transactions in 90 - 120 days after the end of the month.

While the costs, especially those attributable to the cell phone carriers, may appear to be high, it should be noted that most of the carriers and the service bureau have agreed to forego its share of the profits for the Haiti program.  When it comes to a disaster in a poor nearby country that most of us know very little about, cell phone carriers and the American public have shown that they can be extremely generous.

Phone it in America. 

Text HAITI to 90999.

Bob Bentz is president of Advanced Telecom Services—a company that provides mobile marketing services to advertising agencies, advertisers, and media.  As part of its commitment to the earthquake relief efforts in Haiti, Advanced Telecom Services will donate 20% of its revenue received from premium SMS donation programs in February.