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As part of a CES related briefing, I was turned on to a product Motorola is pushing that combines a CDMA femotocell with a software-based phone and a digital picture frame. The femotocell will connect with a user’s existing broadband connection and boost cellular coverage in the home. The picture frame shows pictures and also has a video camera embedded in it. For those of you wondering why this hodge podge of functionality exists, I thought it would be fun to take a look at the trends Motorola is trying to address with this Swiss-Army type device.

1. Femtocells: They were hot last year, and this year they may actually see some widespread deployments as carriers cop to the fact that people want decent cell phone coverage in their homes after dumping their landlines, and that means offloading some of the network traffic onto a DSL or fiber backhaul network makes sense. The Moto version is CDMA, meaning it will work with Verizon (a VZ) and Sprint’s current 3G networks in the U.S. Other players offering CDMA femotcells are Airvana (which provides the silicon for the Motorola femtoframe) and Samsung.
2. Design: Last year saw more folks complaining about their ugly routers; now, apparently, the consumer electronics industry is finally taking a page from Apple and trying to gussy up our gadgets. Turning a femotcell into a digital picture frame is one way of making an ugly black box with lots of blinking lights into a slightly less ugly black box that also shows pictures. As devices migrate out of home offices and into the living room near our aesthetically pleasing flat screen TVs, they’d better look better.
3. User Generated Feedback Goes Beyond the Web: Sure, the web has plenty of ways for users to customize their experiences and offer feedback, but in the coming year, businesses are going to be looking even deeper. In a talk at our NewTeeVee Live event, David Verklin of Canoe Ventures detailed how service providers will use interactive IP communications to make advertising more relevant for consumers, and more lucrative for service providers. With the Motorola frame, a user can voluntarily offer details about their home (such as the number of windows, building material, etc.) to the service provider to help optimize coverage — a less invasive use of interactivity that can still benefit businesses.

Motorola wasn’t able to tell me how much this device will go for or even how much it might cost to make, but Rob Malnati, a senior manager at Motorola, said it would likely be offered through the carriers as part of the current subsidized model for consumer premise equipment. It will be available for trials in the first part of this year. I can’t see Verizon or Sprint choosing to offer something like this if it costs a lot more for them. On the other hand, I might pay a slight premium for one less box of blinking lights on my desktop.

Faced with a free moment on Saturday night, I succumbed to the temptation to check the GigaOM site on my BlackBerry. But when I clicked on my browser, I ended up in the Verizon start page. After checking that I had indeed clicked through the correct icon, I realized (with some irritation) that I had to go back in and change my settings to get my GigaOM home page back.

A quick call to Verizon’s customer service elicited no information, other than a guess that the phone had been updated and it erased the settings. Beyond the irritation, the unexpected and unauthorized change to my settings was a reminder that the phone still exists in a completely different world from that of the desktop or the notebook. If people connected to the web and found their settings changed by their ISP, there would be freakouts all over the blogosphere.But on the phone, the place where we’re spending an increasing amount of our online minutes, mild irritation and a quick jaunt over to settings was all I could muster. However, with beefier computers such as netbooks relying on mobile networks (and faster wireless networks such as WiMAX that are angling to compete with cable and DSL), perhaps I should freak out.

Such an update is pretty invasive, especially from a carrier that already blocks some of my smartphone’s niftier features, such as navigation, in hopes of lining its own pockets. This little incident has me wondering: As we do more over wireless data networks, what rights should users expect, and how should carriers communicate the rights they’re willing to give — and take?

Level 3 stock might be trading below a buck, and its future might be cloudy, but the company has to be thrilled with this news from Renesys, an Internet monitoring company, which claims it’s the largest IP network in the world, ahead of Sprint, which apparently just can’t get a break, even though they are growing. 

Renesys explains that the rise of Level 3 has been driven by its overseas growth, especially in Asia. Global Crossing saw similar gains because of growth in Asia, where it has started to offer transit services to more carriers. As we have noted previously, the growth in traffic in Asia is driven by the surge in the economic activity in the region, along with increased demand for faster broadband pipes. Here are the top five by rank:

1. Level 3
2. Sprint
3. Global Crossing
4. Verizon (formerly MCI/WorldCom/UUNet)
5. NTT

On its blog, Renesys explains that while rankings are a “crude measure of size, as they are based entirely on the quantity of IP space ultimately transited by each provider,” it is comfortable with the approach. The results are based on routing data which, it says “is inherently public.”

Today the Federal Communication Commission will vote on two large wireless mergers and issue rules regarding a proposal to create an alternative wireless broadband network in the unused spectrum between digital television stations. Between the white spaces issue championed by Google and other tech titans, approving the Sprint-Clearwire joint venture to create a nationwide WiMAX network and approving the Verizon-Alltel merger, there will be a lot of winners and losers. So it’s a big day at the FCC and for the wireless industry in general, which is why I found an editorial published on Ars Technica so worthwhile.

The author, Thomas W. Hazlett, a professor of law and economics who serves as Director of the Information Economy Project at George Mason University School of Law, argues that by allowing TV broadcasters access to so much spectrum for an old-time way of business (broadcasting might be better done over satellites and the web, he argues), the 294 MHz of spectrum used by television is wasted. That spectrum could and should be licensed for a 21st century technology, Hazlett argues. From his editorial:

Radio spectrum is the life blood of the wireless era. Television broadcasting squanders it, crowding out incredibly productive alternatives, including improved voice networks, high-speed Internet access, and a phalanx of Silicon Valley dreams yet unknown. Valued at recent prices in Federal Communications Commission auctions, digital TV frequencies would fetch about $120 billion. Yet, consumer gains are at least ten times higher.

He points out the current wireless spectrum for phone calls use 190 MHz of spectrum, and generated $140 billion in revenue last year for companies. His plan is to break the existing digital TV band into seven licenses of seven 42 MHz channels, and license that spectrum to the highest bidder — provided they don’t interfere with existing broadcasters. That bidder can then buy out current broadcasters and raise the funds necessary to offer a new service in the spectrum.

However, depending on how those new channels are licensed, there would be no guarantee of a new 21st century service. The current spectrum holders would be willing and able to snap up new spectrum to protect their own interests, which might not be the type of 21st century service Hazlett envisions. Because spectrum is so valuable, economic interests override technology and even utility in some cases. Hazlett’s not accounting for the incumbent players’ economic interests, which could overrun any thoughts of future technologies and utility.

As the economic crisis continues to wend its way through world markets, telecom companies such as Qwest have begun putting the brakes on some of their growth initiatives. But if recent comments by CEO Ivan Seidenberg are any indication, Verizon Communications isn’t making retrenchment plans. Speaking at the Dow Jones-Nielsen Media and Money conference earlier this week, Seidenberg reportedly told the crowd that Verizon wasn’t worried about the fluctuating stock market and was going ahead with its previously announced plans. According to Deal Journal, he said:

“We have to retool the work force. We’re not going to do it by hunkering down. We’re going to do it by reinvesting…we can’t allow this period in which we feel bad about dislocations to take away from what America should be doing, which is creating competitive edge. If we ever lose our nerve to continue to take risk, then we’re in a lot of trouble.”

So bring on the fiber and bring on Alltel! Seidenberg is pressing the FCC to approve Verizon’s proposed $28.1 billion buy of the cell phone maker service provider that will require the company to take on $22.2 billion of Alltell’s debt and refinance another $7.7 billion coming due this year. The FCC is expected to vote on the merger at its Nov. 4 public meeting. As for fiber, Verizon’s still pushing FiOS to new markets as part of its $18 billion plan to offer fiber to the home. Seidenberg may be content to take risks despite the stock market’s gyrations, but given the debt Verizon will need to take on, I think he might be wearing rose-colored glasses.

Earlier today the second of two governmental hearings related to online privacy got underway. This particular hearing focused on deep packet inspection and how Internet service providers want to mine your data. The hearing kicked off with new data from Consumer Reports that said 72 percent of Americans are worried about their actions being tracked online. But apparently 61 percent are confident that what they do online is private and isn’t shared without their permission.

After the hullabaloo about NebuAd, which wanted to use deep packet inspection technology to determine where users surfed and then sell advertising against those surfing habits, I imagine consumers are more aware than ever about threats to their online privacy. But after listening to the hearing I’m not sure we will get meaningful legislation on this topic.

Already, the ISPs testifying before the committee, which included AT&T, Time Warner and Verizon, pushed the idea of self-regulation by the ISPs when it comes to online privacy. If the testimony from the AT&T executive doesn’t scare the heck out of anyone thinking their data isn’t tracked online, you’re clearly not listening. Broadly, all of the ISPs wanted some kind of informed opt-in to permit tracking on their online activity. For more details, plus the ISP’s plans for ensuring consumer privacy without legislation, check out their statements.

Representing the public, or at least the people who don’t make money from online advertising, was Public Knowledge President and Co-Founder Gigi B. Sohn, who warned against the use of deep packet inspection technology. She compared the use of DPI to ISPs reading your mail — an analogy used by FCC Chairman Kevin Martin when he issued the enforcement order last month against Comcast for throttling P2P traffic. Sohn said that:

ISPs are opening these envelopes, reading their contents, and keeping or using varying amounts of information about the communications inside for their own purposes. In some cases, ISPs are actually passing copies of the envelopes on to third parties who do the actual reading and use. In others, ISPs are using the contents to change the normal ways that the Internet works.

Some of the senators were clearly disturbed by the amount of information that could be collected via deep packet inspection and later sold for advertisers. Others wanted a way for consumers to see and control their online profiles. From a consumer perspective, I want to know if Congress will decide that an opt-in strategy will be enough, or if it will attempt meaningful legislation to protect privacy and data collection online. And how far would that legislation go? Would it address the data collected by search engines? Our cell phones? There’s a lot at stake here.

Comcast is out defending its bandwidth caps and how they are not bad. And how 250 GB transfer is plenty and enough to do whatever we want to do. Of course, in today’s terms that is more than enough, but what happens in the future? Nevertheless, if they are going to put caps, then they need to give us what I think is an acceptable expectation: a meter.

Metered billing needs a meter we can see, use and monitor any time we desire to do so. Water and electric utilities provide that meter (regardless of whether we use it or not), so why not Comcast?

If a customer surpasses 250 GB and is one of the top users of the service for a second time within a six-month timeframe, his or her service will be subject to termination for one year. After the one year period expires, the customer may resume service by subscribing to a service plan appropriate to his or her needs.

Figure out a way to tell us what our monthly usage is, and let us know if we are running up against a 250 GB cap, so that we know when to stop and not pay overage. I want to know at every single minute how much bandwidth I have used.

After all, if someone crosses the 250 GB twice in six months, they are going to get tossed out. The burden of proof lies with Comcast to prove, measure and meter to the most accurate byte of data transferred.

Another Question For Comcast: If you’re going to meter, then please let us know how you are factoring in the overhead associated with TCP/IP. Will this be included or excluded in the cap? After all, overhead includes control messages (session control, packet headers) and this can be as high as 40 percent.

This is where FCC Chairman Kevin Martin has to step up and do something. If he is going to allow Comcast to put caps in place, then the FCC needs a firm bond from Comcast saying that they wouldn’t lower the caps to, say, 150 GB or 100 GB using the same lame excuse of 1 percent people degrading the network.

You want to know why I think they are going to obfuscate the issue and fudge the numbers sooner or later using some Enron math? Just go to the FAQ page that explains their 250 GB cap decision. You will consume 250 GB in a month if you do any of the following:

* Sending 20,000 high-resolution photos,
* Sending 40 million emails;
* Downloading 50,000 songs; or
* Viewing 8,000 movie trailers.

…but then lower down on the same page, they say:

* Send 50 million emails (at 0.05 KB/email)
* Download 62,500 4 MB songs (at 4 MB/song)
* Download 125 standard-definition movies (at 2 GB/movie)
* Upload 25,000 hi-resolution digital photos (at 10 MB/photo)

What is it with you guys? Can’t do the math? Forget that…how about answering a simple question: How many HD movies can you download with 250 GB cap? That’s the only answer I need.

PS: If you believe the 0.05 kb/email then you also believe in the Tooth Fairy.

We have been following the emergence of 4G technologies pretty closely, including the looming battle between WiMAX and Long Term Evolution (LTE). As part of this continuing coverage, we are going to give you short updates on these technologies and current carrier plans. Stacey outlined the 4G plans of various U.S. carriers last week. This post is small update on the state of LTE market.

According to ABI Research, there will be 32 million subscribers on LTE by 2013, though LTE Networks aren’t likely to go commercial before 2010. Equipment maker Ericsson has predicted mass adoption in 2012. ABI says Asia Pacific will have 12 million LTE subscribers, while Western Europe and North America will share the remainder. ABI predicts that LTE will compete with fixed line broadband services such as DSL and spur a big demand for mobile-connected Internet devices — not necessarily personal computers or phones.

Carriers who are betting on LTE include China Mobile, Vodafone and Verizon Wireless. NTT DoCoMo and KDDI in Japan, AT&T and Metro PCS in the U.S., and a few other carriers are still working out plans that involve LTE.

Our previous LTE/4G posts:

• LTE Jumps Ahead In The Race To 4G
• LTE Dreaming of Wireless Broadband
• 10 Things You Need to Know about LTE
• AT&T’s 700 MHz Strategy: LTE
• 4G Wireless And The Ensuing Bandwidth Boom

If this story interests you, check out our upcoming conference:
Mobilize — Mobile Web Today and Tomorrow

Now that I’ve been using the new iPhone 3G for nearly a month, its capabilities and deficiencies are becoming clearer. The newer design makes it sleeker, easier to grip and a joy to look at. And the GPS chip has made the device infinitely useful, though it doesn’t appear that the developer community has started to leverage the technology very effectively.

What’s bad about it? There are a few things (the battery, for instance), but nothing compares to the disappointing 3G wireless connections from AT&T. As I pointed out earlier, there were some issues with AT&T 3G network, though company officials vociferously denied that was the case.

Thirty days later, I can safely say that there are definitely problems with the connection. The speeds are marginally better than the old EDGE network, and videos on apps like MLB At Bat are of poor quality. The signal strength rarely exceeds two bars in most places (except my living room, where it’s at full strength.)

I’m not sure if this is a Bay Area problem or a nationwide problem, nor do I know the cause — the network or the iPhone. One thing is for sure, the new device is pushing Internet data usage and revenues for AT&T in a big way. What is your experience? Share it with rest of us.

CNet News.com reports that there have been widespread complaints but that AT&T isn’t making any statements just yet. “What we’re seeing is that the iPhone 3G is performing very well,” Mark Siegel, a spokesman for AT&T, told News.com. “I’m not denying that people are having problems. But we have to deal with these on a case-by-case basis.”

If this story interests you, check out our upcoming conference:
Mobilize — Mobile Web Today and Tomorrow

As earnings season continues, it’s clear that some in the U.S. have had their fill of broadband. Within the past week AT&T and Verizon reported slowing broadband growth, and today Comcast saw its high-speed Internet access customers grow by 278,000 new subscribers, but added 18 percent fewer customers than it did during the second quarter of last year.

It appears that messing with P2P traffic, the likely enforcement order from the FCC and worries over tiered broadband have done little to dissuade people from moving to cable Internet, perhaps because it’s simply faster than DSL in most areas. During their second quarters, AT&T added only 46,000 DSL broadband subscribers and Verizon added 54,000.

We’ll know more when Time Warner Cable and Charter Communications report earnings next week, but as broadband growth slows, it’s time to tweak the service. Comcast CEO Brian Roberts said on the conference call this morning that the company plans to upgrade its network in 20 percent of its market to DOCSIS 3.0 later this year (Comcast said this last year, too). AT&T is pushing U-verse and Verizon is relying on FiOS. Can the former Baby Bells can lay fiber fast enough to keep their customers for the long-term, or might they nickel and dime them with tiered service to goose revenue in the short term?

As the average consumer embraces ever more complex technology, Verizon is offering a series of classes beginning in New York City to show consumers what their PDAs and smartphones can do for them. I’m sure many of our readers aren’t in need of such a class — which will teach users all about texting, syncing music and emails — but it’s a great idea.

I hated my BlackBerry Pearl when I first got it; it took what felt like forever to figure out how it was supposed to work. If done well, teaching people like me to use their phones should increase data revenue and overall ARPU for Verizon. If done well, it will also make committed smartphone users out of most participants. And luring people into the store and to teach them the “Verizon way,” means consumers are likely to pick up a few high-margin accessories to bolster their education.

People in the technology field know that poor usability and device complexity hurts customer satisfaction, but keep cramming more features into them. As consumers, rather than enterprises, buy more devices and drive technology adoption, usability needs to improve, or else vendors such as Best Buy with their Geek Squad or Verizon with its classes will take up the slack. At that point, consumers are more likely to heed the advice of their favorite Geek rather than the glossy ads of an OEM when looking for their next purchase.