News - Wireless

A Federal Communications Commission engineering report released late Friday essentially backs a plan to create a free wireless Internet service by dismissing concerns about interference for existing providers.

The FCC has been considering auctioning 25 megahertz of spectrum in the 2155MHz to 2180MHz band. As part of the rules for using the spectrum, the FCC plans to require license holders to offer some free wireless broadband service.

The FCC sees the plan, which is based on a proposal submitted to the FCC by M2Z Networks in 2006, as a way to provide broadband Internet service to millions of Americans who either can't afford or don't want to pay for high-speed Internet access.

But existing providers like T-Mobile USA, which spent $4.2 billion in 2006 acquiring spectrum in an adjacent band, say that opening up this spectrum would cause interference and disrupt service.

Friday's report, however, concludes that spectrum could be used as planned "without a significant risk of harmful interference."

Click here for a PDF of the full FCC report.

It should be noted that this free Internet plan is separate from a proposal to use so called unused TV spectrum, also known as "white space" for wireless broadband services.

The blogosphere has been up in arms over the past 24 hours as news spread that Verizon Wireless is planning to increase the per-message fee it charges companies that send text alerts.

On Thursday RCR WirelessN News published a story citing a letter that OpenMarket, a direct to consumer messaging service that sends alerts for companies like Google or Orbitz, was sending to its clients explaining that it would have to tack on an additional three cents for every text message that is terminated on Verizon Wireless network.

"Effective Nov. 1, 2008, Verizon will assess a transaction fee of $0.03 for every MT message processed on its network," the letter said. "Please note that these message fees will apply to standard rate and premium programs. Transaction fees will not apply to Free-2-End-User, Mobile Giving or Non-Profit organizational programs."

OpenMarket went on to say in its letter that it planned to pass on the charges to its clients.

"Pursuant to your Commercial Services Agreement with OpenMarket (including former Simplewire Agreements) concerning Third-Party/Operator Fees, in the event message fees are assessed by Verizon for any of your programs, these fees will be passed on to your company at cost."

The letter ignited a firestorm of criticism from bloggers all over the Web who complained that this steep fee hike would kill services like ChaCha, which allows anyone to text a question to a number from their cell phone and receive an answer relatively quickly.

Others said it would likely discourage brands like ESPN from using SMS text messaging.

"Three cents may not sound like a lot, but think about how much profit ESPN generates for sending you the latest Red Sox score," Brennon Slattery of PC World writes. "Nothing. Raising the fee may eventually discourage companies from participating in the convenient service."

My colleague Sam Diaz at ZDNet said he'd stop using Twitter if the charge was passed along to him.

"Certainly, as someone who updates my own Twitter account somewhat regularly, I'm not inclined to start paying for users to receive my notifications via SMS. If that were the case, I'd just stop using Twitter."

But Jeffrey Nelson, a Verizon Wireless spokesman, said the price hike has not been finalized. Still, he acknowledged that Verizon Wireless has been discussing ways to offset increased costs associated with heavy volumes of SMS text messaging on its network.

"We are currently assessing how to best address the changing messaging marketplace, and are communicating with messaging aggregators, our valued content partners, our technology business partners and, importantly, our friends in the nonprofit and public policy arenas," he said in an e-mail. "To that end, we recently notified text messaging aggregators--those for-profit companies that provide services to content providers to aggregate and bill for their text messaging programs--that we are exploring ways to offset significantly increased costs for delivering billions upon billions of text messages each month."

Even the mere thought that Verizon is considering upping rates on text messaging is enough to get people worked up, especially since Verizon and the other three major wireless operators in the U.S. have increased the price of sending and receiving texts for consumers by 100 percent over the past two years. Rates have gone from 10 cents a message to 20 cents per message.

These price hikes come as the volume of text messages has also increased. Last month, the wireless industry association CTIA reported that 75 billion SMS text messages were sent in June, averaging about 2.5 billion messages a day. This represents an increase of 160 percent over the 28.8 billion messages reported in June 2007.

Even though text volumes have increased, I'm still not sure why Verizon would have to increase rates to cover the cost of delivering the service. SMS text messages cost carriers very little to transmit. In fact, SMS uses a pathway or control channel that already exists in cellular networks to establish communications between cell towers and handsets. Devices are constantly in communication with cell towers to let them know where they are, and the SMS messages are simply delivered along with this normal course of communication.

Given that the carriers haven't had to do anything extra to enable SMS, I'm not sure why increased volumes would necessitate raising rates to cover increased costs. Right now it seems like SMS is nearly 100 percent profit. So Verizon could use some of those existing profits to invest in some kind of expansion of the service.

That said, Verizon notes it hasn't increased per-message costs to aggregators since the messaging service began in 2003. Nelson made it clear that nonprofits and political organizations would not be charged extra to send text. And he emphasized that Verizon is still reviewing all its alternatives.

"Specific information in one proposal, which would impose a small per-message fee on for-profit content aggregators for commercial messages, has been mistakenly characterized as a final decision to implement," he said. "That draft was intended to stimulate internal business discussions and in no way should have been released to the public and represented as a final document."

China Mobile, China's largest cell phone operator, plans to establish a research and development facility in Silicon Valley in 2009, according to a report from ChinaTechNews.com.

This is the first overseas research and development facility that China Mobile has set up, the news site reported.

Like mobile operators throughout the world, China Mobile is looking to add new data services to its offerings. The president of China Mobile's Institute of Research, Huang Xiaoqing, told the news site that it sees most of its revenue today coming from voice services, but the company recognizes that data services are the future. And it's looking to Silicon Valley for innovation.

China Mobile is already working with Google as part of its Open Handset Alliance. And many people believe that the carrier will soon launch an Android phone into the Chinese market. There's also been speculation recently that China Mobile will be the first Chinese operator to offer Apple's iPhone. But reports say a deal may fall through as China Mobile has asked Apple to strip down the phone and remove its 3G and Wi-Fi capabilities.

Apple's iPhone has revolutionized Web browsing on a mobile device, but some users of the breakthrough phone are still frustrated with their experience when surfing certain sites, like Yahoo.

Keynote Systems, which provides testing tools to help companies improve their mobile experience, found in a study released Thursday that satisfaction rates of iPhone users using certain sites were low and only a small percentage of users clicked through on advertising. The results suggest that the usability of many mobile Web sites still needs improvement. It also suggests that advertisers might have to adjust their practices on the mobile Web.

Keynote used the iPhone for its study primarily because the phone is designed for Web surfing. And on average iPhone users spend more time surfing the mobile Internet than users of other smartphones.

"The iPhone is a breakthrough mobile smartphone," Dan Richards, senior product manager at Keynote, said in a statement."But our Keynote WebEffective study shows that the user experience of surfing Web sites is not."

As part of the study, more than 75 participants were asked to find an entertainment news story, read it, and search for a story on another specific top and then send that story to a friend. Keynote found that even big Internet brands, which have invested a lot in mobile development did not score exceedingly well in terms of satisfaction. In fact rates were low for both Yahoo, which only scored 51 percent satisfaction, and Fox News, which scored 64 percent satisfaction for their mobile Web sites.

That said, Fox News users were more likely to find the mobile experience to be better than a computer experience. Meanwhile, Yahoo users were more likely to find the mobile experience to be much worse than a computer experience, according to Keynote.

About 60 percent of Yahoo users reported frustration, while only 33 percent of Fox News users were frustrated. Users said they were most frustrated by site errors, cluttered pages, slow Web site speed and excessive scrolling.

The study also found that only four percent of users clicked on advertisements while surfing. And only a quarter of respondents noticed the advertising, but did not click on it. Another major hurdle for mobile Web surfers had to with search. Many users found search on these Web sites to be difficult.

A number of Telstra's major broadband rivals have said they have no immediate plans to follow the telecommunications company's lead and use the Twitter microblogging service to monitor service outages and contact customers about support plans, though a closer look shows Optus to be one of the only large carriers not using the tool.

Telstra launched the offering over the past several weeks, garnering a mixed response from Australian users of the service, but rivals Optus, iiNet and Internode said they weren't as keen to offer an official Twitter-based service.

iiNet did admit that it had already dabbled in the tool and had an unofficial Twitter account. But the Internet service provider didn't intend on extending the channel to offer Twitter support in an official capacity, according to a company representative.

"For now, we're interested in informally participating in the commodity-free, open-conversation platform that Twitter encourages," iiNet said.

Despite its unofficial nature, answers to iiNet customer queries have been posted on the Twitter stream since the first post, on September 30. In reply to one tweet on whether responses would be coming 24-7, the company said, "Not at this stage, no. For now, it's proof of concept, hurtling towards a greater destiny! We hope."

The iiNet account's opening follows that of competitor Internode, which existed despite the ISP's managing director, Simon Hackett, saying the company was happy with its current use of broadband information site Whirlpool to communicate with customers.

"We're quite open to the idea (of using Twitter), but to date, we're finding that being open and accountable on Whirlpool has served us well for many years and continues to do so," Hackett said.

He said many senior staffers, including himself, were active on Twitter. Recently, when Internode had an outage, Hackett made multiple posts on threads discussing the problems.

Internode's Twitter stream has been in operation since midway through last year. Optus, however, seems to be the odd one out, with no Twitter account, official or otherwise.

"At this point in time, we're not using Twitter. However, we are always looking at emerging technologies and tools to improve the way in which we communicate with our customers," an Optus representative said.

Suzanne Tindal of ZDNet Australia reported from Sydney.

Sprint's chief technology officer, Barry West, uses a pair of hedge clippers at the Xohm launch party in Baltimore to cut a copper cord, symbolizing the end of the wired Internet.

(Credit: Marguerite Reardon/CNET News)

BALTIMORE--Executives from Sprint Nextel and its ecosystem of partners ceremonially cut the broadband cord here on Wednesday with the launch of the first mobile WiMax network in the U.S.

Executives also showed off several new laptops that will have embedded WiMax chips, and they announced that Sprint will be offering dual-mode 3G/4G products by the end of the year. The introduction of new devices and integration with Sprint's existing cellular network could help lay to rest worries about the company's initial strategy. But it's still very early days for Xohm and for WiMax in general.

Sprint started selling the new wireless broadband service called Xohm here last week. The service--based on WiMax, a standards-based technology that uses the 2.5GHz spectrum band--offers average download speeds between 2 megabits per second and 4 Mbps, a huge improvement over the 400 Kbps to 700 Kbps speeds offered using 3G cellular technology.

Baltimore is the first city to get Xohm, but it's expected to launch soon in more cities, such as Chicago and Philadelphia. Sprint's chief technology officer, Barry West, said that Baltimore was an ideal place to launch the service because it is representative of many cities in the U.S. both in geography and population. Surrounded by water and full of low-rise brick buildings, the environment also was a challenge for radio frequency engineers designing the network.

But building the network is only part of the challenge. Getting devices in the market that can use the WiMax technology is crucial to making Sprint's 4G strategy a success. Sprint currently claims to have at least a two-year head start over its wireless competitors AT&T and Verizon Wireless, which both plan to use a technology called LTE (Long Term Evolution) to build their 4G network. But unless device makers can get products into the market and in the hands of consumers, the head start might not amount to much. Sprint seems to recognize this.

"The news on September 29 was about the network," West said. "Today it's about the devices, and the defining thing is the embedded model. And it means that everything will come with WiMax."

Sprint was joined at the event by its many partners to celebrate the launch and to show off devices that will be able to access the network. Intel announced that it is now shipping its first-ever combined WiMax Wi-Fi module for laptops. Four notebook manufacturers--Acer, Asus, Lenovo, and Toshiba--said Wednesday that they will include the Centrino 2 chips in their notebooks. These new laptop computers are available now via Amazon.com and NewEgg.com. Dell, Panasonic, Samsung, and Sony also plan to support the WiMax/Wi-Fi chips in their new laptops that will hit the market in 2009.

From Wi-Fi to WiMax
Intel executive vice president Sean Maloney said he expects the evolution of WiMax to follow the same pattern as that of Wi-Fi. He said that seven years ago when Intel first started pushing Wi-Fi into the market, many people didn't believe Wi-Fi would ever take off. But today, Wi-Fi has clearly become a huge success, shipping as a standard feature in almost every laptop on the market. It is also finding its way into dual-mode cell phones, like Apple's iPhone and Google's new G1 offered through T-Mobile.

But Maloney pointed out that Wi-Fi has a "frustrating limitation," which is that it doesn't cover a large geographic area. This is where WiMax comes in. He said that WiMax, which can create a hot spot over an entire city rather than a much smaller area like a coffee shop or a home, provides huge amounts of bandwidth over a big enough footprint to finally make Web 2.0 applications accessible to mobile devices.

But Sprint's WiMax network is still small. Right now, the service is only available in a handful of cities. And even in those cities, it's not 100 percent complete. West acknowledged that Sprint and its soon-to-be partner Clearwire have a long way to go in terms of covering the country with WiMax signals. But he said the new Clearwire, which will combine spectrum assets from Sprint and Clearwire, has more than enough spectrum to build a robust 4G wireless network.

"There are holes in our service today," West said "Over time, we will have the same network as everyone else. But you can't do it all at once."

Until Sprint is able to complete its 4G network, the company plans to use its 3G cellular network to augment the service. Sprint CEO Dan Hesse announced at the event here that the company will be offering devices that will be able to automatically switch between the 4G Xohm WiMax network and its EV-DO 3G cellular network. Sprint will be offering the first dual-mode 4G and 3G wireless technology in its laptop air cards by the end of the year. Pricing details for a combined service haven't been released, but Hesse said consumers can expect to pay more for higher speeds and better coverage.

"It will take a while for the new (4G) network to be built ubiquitously," Hesse said. "And we will have new multimode devices that will use 4G where it's available, and when it's not it will downshift to 3G to provide that ubiquitous data coverage."

But the current economic crisis has led many skeptics to question whether Sprint and Clearwire will have enough money to finish building their nationwide network. The companies, which announced their proposed merger in May, expect to get final regulatory approval by the end of the year.

Hesse said the Clearwire will need a total of about $5 billion to complete its network. The company has initial funding of about $3.2 billion, which means it will need to raise another $2 billion to complete the network. He acknowledged that the current economic crisis could make accessing this capital difficult. But he said he is confident that if the company found itself unable to get the necessary funding that it could turn to its partners for the cash.

"Just look at the cash on our partners' balance sheets," he said "We've got Intel, Google, the cable companies, and even our own cash. That is the advantage of having six well-capitalized founders."

Chipmaker Broadcom announced on Wednesday it is once again suing Qualcomm, claiming the company's sales and licensing practices amount to patent misuse.

The complaint was filed Tuesday in the U.S. District Court for the Southern District of California in San Diego. According to Broadcom's claims, Qualcomm receives royalties twice for its patents by controlling the post-sale use of its already-"exhausted" wireless communications patents. Qualcomm's control over its patents constitutes misuse, Broadcom claims, and has brought harm to the industry and consumers.

The lawsuit continues a series of battles over wireless communications patents between Qualcomm and Broadcom. Most recently, a federal appeals court on Sept. 24 affirmed an earlier ruling in federal court that Qualcomm was infringing upon two of Broadcom's cell phone patents. The appeals court did, however, find that Qualcomm was not infringing upon one other patent in question.

In 2007, the U.S. International Trade Commission banned the import of new models of 3G wireless handsets with Qualcomm chipsets because they infringed upon a Broadcom patent. Broadcom's disputes with Qualcomm over wireless communications technology began in 2005.

At least two analyst groups have cut their forecasts for global cell phone sales for the coming year due to consumer concerns about the economy.

UBS analyst Maynard Um told Reuters he's cutting his forecast for growth in the sector in half, from 6 percent down to 3 percent, with the North American and European markets being particular slow. JPMorgan analyst Ehud Gelblum cut his forecast as well, from 8.1 percent to 6.1 percent. He also cited Europe as being especially sluggish, and said he expects to see "more modest" growth in China, the report said.

Those figures aren't all that surprising when you consider that so much of the population in Europe and North America already have cell phones. Troubled times might lead some people to put off upgrading to a newer, shinier handset if they have one that already does the trick. But in a less-saturated market like China, people might be more likely to splurge on wireless technology.

A separate report might indirectly suggest those analysts are onto something. MetroPCS on Monday released their quarterly subscriber numbers, saying they've added 935,000 in the third quarter, 39 percent increase over the same period the previous year. Churn, which measures customer turnover rate, dropped 0.4 percent for the quarter. Those figures could indicate that Americans are looking to low-cost, flat-rate cell phone plans as a way to trim expenses.

But if consumer worries about the economy are affecting cell phone sales, the same might not be true for all consumer electronics. Sales of flat-panel TVs and game hardware during the upcoming holiday season should fare just fine, according to the Consumer Electronics Association.

VeriSign on Tuesday announced that it has sold its minority stake in mobile-entertainment joint venture Jamba to partner News Corp. for approximately $200 million.

The sale bumps News Corp.' unit Fox Mobile Entertainment's share of Jamba from a 51 percent stake to full ownership. And it enables VeriSign to focus on its core Internet infrastructure business, according to Jim Bidzos, the company's interim CEO. VeriSign runs the master database for such domains as .com and .net.

The joint venture was announced two years ago, when Rupert Murdoch's media company acquired a controlling stake in VeriSign's mobile-ringtone subsidiary, Jamba, for $188 million.

That deal propelled News Corp. into one of the world's largest mobile-entertainment companies, providing through Fox Mobile Entertainment Jamba's ringtones, mobile wallpaper, and other such offerings.

Verizon Communications suffered a major blow in its patent battles on Monday, when a federal court ruled that cable company Cox Communications had not infringed on its patents.

The telecommunications giant has accused Cox of violating six of its patents related to Internet telephony. But a jury for the U.S. District Court for the Eastern District of Virginia decided against Verizon on all six patents.

Verizon settled a similar suit against digital-phone service provider Vonage last year, squeezing about $117.5 million from the troubled provider of voice over Internet Protocol, or VoIP. Against Cox, it had been seeking past damages of $404 million.

Many analysts and experts believed that Verizon had been emboldened by its Vonage patent battle and was looking to go after bigger players, such as cable providers. Companies such as Cablevision, Comcast, and Time Warner Cable have been offering VoIP services for the past few years. And they've been very successful in converting millions of Verizon customers to their service.

But with this latest court decision, it looks as if Verizon may have to rethink its legal strategy. The company recently reached a deal with Comcast in which both companies agreed not to sue each other for a period of five years for any patent infringement. But there had been speculation that Verizon might target Time Warner Cable and Cablevision.

"Despite the decision, we believe our patents were infringed," Verizon said in a statement. "We will continue to innovate and protect our intellectual property."

The company also told The Wall Street Journal that it hasn't decided whether to appeal the decision.