For the Week Ending October 29, 2010

This Week’s Stories______the 1700/2100/700 MHz bands, and goes for $49.99 with a two-year contract, data plan and mail-in rebate.

Qualcomm in Talks to Exit India However, AT&T spokeswoman Jenny Bridges confirmed Broadband - Report the gadget will not work over the 700 MHz LTE network October 26, 2010 Verizon plans to launch later this year. Verizon has said it expects to cover 38 cities and 110 million POPs this year with LTE, while AT&T has said it will launch LTE in the U.S.-based mobile chip supplier Qualcomm is looking to 700 MHz and AWS bands (1700/2100 MHz) next year, sell its wireless broadband business in India for a covering 70-75 million POPs by the end of 2011. minimum of 50 billion rupees ($1.1 billion), the Economic Times reported on Wednesday. Though the nation's two largest carriers are using the same band--700 MHz--for LTE, the two are using different The company has approached leading Indian mobile flavors of 700 MHz for their LTE network deployments. phone operators and made presentations to them, offering Verizon acquired most of the FCC's 700 MHz C Block stake in the four circles where it holds airwaves and spectrum (which lies in band class 13) in 2008, while permits, the newspaper said citing sources with direct many of AT&T's 700 MHz licenses sit in the lower A and B knowledge of the matter. Blocks (which lie in band class 17). Thus, to reliably roam from AT&T's LTE network to Verizon's, device makers will Qualcomm had spent about $1 billion to buy wireless first have to build LTE gadgets that support band classes airwaves in Mumbai, New Delhi, Haryana and Kerala 13 and 17. AT&T and Verizon also would have to ink an circles in an auction earlier this year. LTE roaming agreement.

In July, it agreed to sell 26 percent stake in its India While notable, the fact that AT&T's first LTE-capable broadband venture to Indian firms Global Holdings and device can't be used on Verizon's LTE network isn't Tulip Telecom for about $58 million. exactly a surprise. Roaming considerations often take a backseat in wireless carriers' network deployments. And Qualcomm has told the potential buyers they would have despite the fact that LTE will form the basis for much of to give an undertaking to use the airwaves only to offer the world's move to 4G network technology, the services in its upcoming Long Term Evolution (LTE) hodgepodge of spectrum allocated to LTE likely will technology, the paper said. prevent ubiquitous roaming for some time. Indeed, MetroPCS' Samsung Craft--the nation's first LTE phone-- does not support 700 MHz connections and therefore It quoted a Qualcomm official as saying the company won't work on Verizon's forthcoming network either. would work with operators to develop and commercially deploy the technology before exiting the India venture. ($1=44.4 rupees). http://www.fiercewireless.com http://www.reuters.com Apple Joins Top Five Handset Makers Worldwide as Nokia Slips AT&T's First LTE-Capable Device Won't October 29, 2010 Roam onto Verizon's LTE Network October 26, 2010 Apple Inc. became one of the world’s top five mobile- phone vendors in the third quarter while market leader Nokia Oyj’s share fell, two industry research groups said. AT&T Mobility's recently announced LTE-capable USB stick will not work on the LTE network Verizon Wireless is scheduled to launch later this year, Apple vaulted past Research In Motion Ltd. and Sony according to an AT&T spokeswoman. The Ericsson to fourth place, helped by the introduction of the news underscores the business and iPhone in new markets, International Data Corp. and technical challenges that remain in the Strategy Analytics said today in reports. If Apple produces market's push for LTE network an iPhone for Verizon Communications Inc.’s CDMA technology. network, that could boost it further, Strategy Analytics wrote.

AT&T earlier this month unveiled the USBConnect Adrenaline from LG as its “The entrance of Apple to the top five underscores the first LTE-upgradeable device. Customers increased importance of smartphones to the overall will be able to use the gadget on AT&T's forthcoming LTE market,” Kevin Restivo, an IDC analyst, said in the report. via a software upgrade. The Adrenaline supports LTE in “Vendors that aren’t developing a strong portfolio of

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smartphones will be challenged to grow and retain market The investigation found that approximately 15 million "pay- share in the future.” as-you-go" customers were or may have been overcharged for data usage over the course of three Nokia, the world’s biggest mobile-phone maker since years, from November 2007 to the present. 1998, slipped to 32.4 percent of the market from 36.5 percent a year earlier as Chinese brands challenged the In an official statement, Verizon Wireless pointed to the Finnish company in emerging markets, according to IDC complexity of its internal business processes, saying the figures. Samsung Electronics Co., the second-largest, charges were the result of "inadvertent billing mistakes." rose to 21 percent while the other big Korean handset vendor, LG Electronics, slipped more than two percentage "We accept responsibility for those errors, and apologize points to 8.3 percent, IDC said. to our customers who received accidental data charges on their bills," the statement read. Sony Ericsson fell off the top-five list for the first time since IDC began tracking the numbers in 2004. According to the settlement, the erroneous mystery fees from Verizon Wireless were caused by: unauthorized data Component Shortages transfers initiated automatically by applications built into certain phones; accessing certain web links that were Global shipments rose 14.6 million to 340.5 million units designated as free-of-charge (e.g., the Verizon Wireless according to Framingham, Massachusetts-based IDC. Mobile Web homepage); unsuccessful attempts to access Strategy Analytics pegged them lower, at 327 million units, data when there was insufficient network coverage to noting that the rate of growth slowed from the first half as complete the requested data transfer; and unwanted data component shortages trimmed sales. transfers initiated by third parties and affecting customers who had content filters installed on their phones. “Touchscreens, application processors and cameras are among the components experiencing volatile supply,” Neil Verizon acknowledged that the "single largest problem, Mawston of Strategy Analytics wrote in his report. involving the vast majority of credits, was caused by a very small data "acknowledgment" session sent by software pre-loaded on certain phones," asserting that the problem “Many component manufacturers reduced production affected only some of the customers who did not have output during the recession of 2009 and they are data plans, and who were not otherwise intentionally using struggling, or even unwilling, to restore the capacity in the the data features on their devices. upturn of 2010.” Verizon Wireless has agreed to cease charging customers The analysts’ totals and market share figures differed the incorrect fees. In addition, the company has agreed to because IDC counted a larger number of handsets for the take affirmative steps to prevent future unauthorized data “other” category, which included new vendors in Asia. charges. http://www.bloomberg.com The company will immediately begin repayment of the 15 million customers. Customers who have been identified by FCC, Verizon Reach Consent on Mystery Verizon Wireless as being potentially being overcharged for data usage will receive refunds or credits on their Fees October or November bills. October 29,2010 The Bureau also tasked Verizon with ensuring that The FCC's Enforcement Bureau reached consent with customers are treated fairly in the future. Verizon Wireless to return $52.8 million to customers who fell victim to "mystery fees," which the company charged its customers over the last several years. Additionally, the Verizon Wireless has agreed to offer data blocks on Bureau ordered Verizon Wireless to pay $25 million to the request, plain-language explanations of "pay as you go" U.S. treasury. data charges and data plans, and post an online video tutorial to help consumers understand their bills. The Enforcement Bureau began investigating Verizon Wireless in January 2010 after a large number of Verizon was also ordered to create a Data Charge Task complaints and press reports about unexplained data Force, staffed by specially trained customer service charges surfaced. The investigation focused on "pay-as- experts who will monitor and resolve data charge you-go" data fees, charges of $1.99 per megabyte that complaints and other data charge-related issues going apply to Verizon Wireless customers who do not subscribe forward. The Task Force will issue regular reports to the to a data package or plan. FCC so the agency can ensure compliance.

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The Bureau noted that Verizon's repayment obligations merchants trialing the Mobile Express Checkout beta have are not capped at the estimated $52.8 million in refunds reported double-digit sales growth on their mobile identified by the company. Customers who do not receive storefronts. a refund but believe they had unauthorized data charges have a right to appeal, receive a good-faith review, and http://www.fiercemobilecontent.com reach resolution within 30 days. Verizon Wireless is required to disclose any unresolved complaints to the FCC. Verizon Introduces Tiered 3G Data Plans October 29, 2010 "There is nothing more satisfying to the public spirit than to right a wrong or rectify an injustice," said Michele Ellison, Verizon Wireless quietly launched tiered mobile data plans Chief of the FCC's Enforcement Bureau, in a statement. for smartphone customers as well as a range of options for tablet and mobile hotspot users. The new smartphone "We salute the consumers who had the tenacity to call plans, which are not permanent (at least not yet), are attention to this problem. We will continue to monitor the another indication that wireless carriers are willing to company's compliance going forward. And, consumers, if embrace usage-based data plans. you need us, our lights are always on," Ellison said. As had been rumored, the nation's largest carrier kept its http://www.wirelessweek.com unlimited data plan for $30. Verizon added a $15 option for 150 MB of data. Verizon spokeswoman Brenda Raney said the new $15 plan is promotional, but declined to say Products & Services______when it will end. She said the plan will help users transition from feature phones to smartphones. AT&T Kicks Off Multi-Partner Mobile AT&T Mobility decided to do away with unlimited data Payments Trial plans for smartphone customers in June, and currently October 28, 2010 offers two tiers for smartphones: $15 for 200 MB and $25 for 2 GB. T-Mobile USA has been rumored to be planning AT&T is launching a mobile payment trial enabling a $10 offering for 200 MB of data. subscribers to charge online products and services directly to their monthly wireless bill. AT&T customers can now In addition to the smartphone plans, Verizon also scoop up digital music, movies and virtual goods by launched a slew of data plans for tablets, mobile hotspots entering their mobile phone number instead of their credit (like the ZTE-made Fivespot) and netbooks. Customers card or PayPal information; the operator will partner with can get 1 GB of data for $20 per month; 3 GB for $35; 5 no fewer than three different mobile payment solutions GB for $50; and 10 GB for $80. Those plans are providers--BilltoMobile, Boku and Zong--and will collect an permanent. Verizon now offers Apple's iPad, and also will unspecified percentage of profits derived from all launch Samsung's Android-powered GalaxyTab tablet purchases. Nov. 11.

BilltoMobile inked a similar deal with AT&T rival Verizon Verizon executives have long indicated that the carrier will Wireless in March 2010--its Direct Mobile Billing service introduce tiered or usage-based pricing in conjunction with promises simple, secure two-step payments that require its launch of its LTE network, which is expected before only seconds to complete. Boku--which boasts year-end. partnerships with 220 mobile operators in more than 60 countries--also enables two-step authorization and AT&T CEO Randall Stephenson said last month the capture, transaction processing and tools to refund carrier's new, lower data pricing has encouraged users to charges back to the customer's account. Zong partners try out AT&T's data services. incude T-Mobile, Vodafone, Orange and O2--it is also the mobile payments provider for Facebook Credits and other social gaming and networking platforms. http://www.fiercewireless.com

According to a Generator Research forecast issued earlier this year, the worldwide market for mobile payments will grow to $633.4 billion by 2014, up from $68.7 billion in 2009. Earlier this week, eBay-owned digital commerce solutions provider PayPal launched Mobile Express Checkout, a secure, two-click payment tool enabling consumers to remain logged in across multiple mobile applications to simplify purchases. PayPal reports that

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Industry News______Only 5.1 percent of those surveyed think the Internet is safer than it was a year ago, while 68 percent feel it's about the same, and 21.2 percent believe it's less safe. People feel safer on a PC than on a Half of those polled cited identify theft as a major concern. mobile device Overall, 44 percent of the respondents see themselves as responsible for their own online safety. Only 30 percent October 28, 2010 believe keeping the Internet secure is the responsibility of Internet providers, while just 4 percent feel it's the A majority 87 percent of people polled for a new study government's job. think their home PCs offer better defense against viruses, malware, and hackers than do their mobile phones. To compile the study, the NCSA commissioned a survey Released today by the National Cyber Security Alliance of 3,498 Americans, while Symantec ran an analysis on and Symantec, the study (PDF) also discovered that some 400 PCs. people may be overconfident in the power of their http://news.cnet.com computers to protect them as less than half are using full security software.

Though only 24 percent of those polled said they feel very With Internet TV, Cable Wins Even if it safe using their home computers to surf the Net, 61 Loses percent said they feel somewhat safe. In contrast, just 18 October 29, 2010 percent said they feel very safe using their mobile phones to access the Web, while only 28 percent feel somewhat safe. Americans, little by little, are cutting the proverbial cord on cable television. But that doesn't mean they're breaking up with their cable companies. When asked if they run a complete security suite, 58 percent said yes. But Symantec's scans found only 37 percent fully protected. Symantec's definition of a In addition to controlling most of the paid TV market in the complete security suite includes antivirus, firewall, U.S., cable companies are also poised to dominate the antispyware, spam filtering, antiphishing, and identity broadband market. This means that even when people protection. Like many of these polls, the companies doing drop their pricey cable TV packages, they're still likely to the polling have a vested interest in the results--in this pay the cable company for access to the Internet, which is case Symantec sells its own complete security suite. But used to deliver the video streams to their TVs. For cable that by itself doesn't necessarily make the findings less operators, it's a "heads we win; tails we win" situation. credible or relevant. Neil Smit, president of Comcast's cable division, admitted The study also learned that people are connecting to the as much during the Internet from a wider array of devices. Half of those polled said they have two or three PCs at home, with 74 percent "If over-the-top comes into being, there is more owning a laptop or Netbook. Almost 17 percent are able to consumption of online video," Smit said. "We feel very access the Internet from their TV and 24 percent from a good about our capacity. That is one of the reasons we gaming console. have invested so heavily in DOCSIS 3 (the cable technology that allows operators to provide download To surf the Net from all their gadgets, 70 percent have a broadband speeds up to 160Mbps). We feel that that big Wi-Fi router at home. Some 85 percent of those people pipe into the house is important and we will continue to said their routers are password protected. But among all of invest in speed increases like that, like DOCSIS 3. We those polled, 43 percent admitted to jumping onto Wi-Fi think it's an important component and the consumers networks not secured by a password, a number that continue to consume more bandwidth." surged to 66 percent for those 18 to 29 years old. So what does that mean for average consumers? For "Computer users can run into online threats regardless of those of us left behind with traditional cable services, it where they might be connected and what device they're could well mean that the cable companies increase fees in using," Marian Merritt, Norton Internet Safety Advocate, order to pay for the contracts they have with content said in a statement. "However, on a Wi-Fi network, there producers like the TV networks. For those who do leave are other risks consumers can run into, like 'evil twin' cable TV, there's a very good chance they're paying the networks that trick people into connecting to unknown same provider for a different service--broadband access. networks, giving cybercriminals access to their computer and its contents. Consumers should ensure they're "People should not think of cable companies as media connecting to a legitimate network, using the access keys companies," said Craig Moffett, a senior analyst at Wall or portal given to them by the Wi-Fi provider." Street equities research firm Sanford C. Bernstein. "They

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are infrastructure companies. And they are in business to quarter and 41 percent during the same quarter a year make a return on their physical infrastructure." ago.

But instead of simply raising prices on cable broadband, Broadband benefits Moffett said it's more likely that cable operators would But regardless of whether this trend continues, Comcast move toward usage-based pricing. That way consumers and other cable companies are likely to benefit since they who use more bandwidth to stream movies and TV shows also control the broadband connection into the home. The end up paying more per month for service than people phone companies' biggest weapon in the broadband fight who may be getting their video from the traditional cable has been their new fiber-based networks: U-verse for TV network. AT&T and Fios for Verizon. These services have competed head-to-head with cable in markets where Time Warner has tested usage-based billing, but the they're available. But neither AT&T nor Verizon is covering company faced a huge backlash from consumers. Still, its entire territory with these expensive network upgrades, Moffett said that broadband service providers may have which means that many customers without access to U- no choice as bandwidth-intensive video streaming verse or Fios services have the choice of slower DSL or services like Netflix become more popular. Sandvine cable. As the numbers show, many are choosing cable. recently issued a report showing that Netflix traffic already accounts for more than 20 percent of downstream traffic During the second quarter of 2010, cable captured a during peak times on U.S. broadband networks. record 90 percent of all new broadband additions, according to a report Moffett wrote. Of course, the number of people today who are cutting their cable cord and watching TV from the Internet is still "Cable's broadband dominance opens the door for small. But people are cutting the cable cord. Just ask renewed share gains in the adjacent video market," Comcast, which went on the defensive earlier this week Moffett said in his report. "Cable companies could simply explaining why it lost a net of about 56,000 TV subscribers increase their a la carte broadband prices (since in most during the third quarter of 2010. (Comcast announced it markets, households have no other choice for sufficiently had lost 275,000 basic cable subscriptions during the third fast broadband) and simultaneously drop their video quarter. Meanwhile it added 219,000 digital TV pricing, leaving the price of the bundle unchanged, to subscribers. This means that it lost a net of about 56,000 recapture video share." video subscribers during the quarter.) He pointed to an example of this in Albany, N.Y., where "All our exit surveys have seen almost no impact (from Time Warner Cable raised its broadband price by 10 people switching to Internet TV)," Smits said during the percent for its Internet-only customers to a rate just $2 conference call. "We have seen customers who are below its promotional bundled rate for both services. The disconnecting and not going to a competitor. That small Internet-only price increased to $54.95 from $49.95. The number of customers appear to be going over-the-air 12-month promotional rate for video and data was $56.95. (using antennas to get free TV) much more than any over- the-top impact (TV from the Net)." Even without changing its pricing, cable companies are starting to see consumers choose more expensive Even though Comcast denies these people are flocking to services with faster speeds. Smits said during the sites such as Netflix, they have admitted that the weak company conference call that more than 20 percent of economy is driving them toward less expensive forms of Comcast's customers subscribe to higher speed tiers of entertainment. As more content deals are struck with services. He considers the "blast level" services to be 8 companies such as Netflix, people looking to save a buck Mbps and above. As a result the company saw an on TV, and who also have a broadband connection, will increase in the average revenue per user of its broadband likely gravitate toward the Web for TV and movie viewing. services. And with faster 50 Mbps and 100 Mbps speeds on the way, the company has a lot of leg room to up-sell Netflix, which is just one of many over-the-top video broadband consumers. options available to consumers, is quickly expanding its customer base. During the third quarter the company saw Of course, Comcast and the rest of the cable industry are its subscriber base jump 52 percent compared to a year not giving up on their TV business. This week Comcast ago. relaunched Xfinity TV, the company's TV-everywhere on- demand video service. It provides access to 150,000 Netflix's CEO Reed Hastings said on the company's movies, TV shows, and other premium HD content online earnings call earlier this month that the streaming offer and can be viewed on various different devices such as was definitely fueling subscriber growth. Netflix said 66 laptops and tablets. The service is available to digital percent of its subscribers used its streaming content video customers who will get an ID and access to the during the third quarter, up from 61 percent in the second service at no extra charge. By the end of this year, the

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company expects to have the service available on Apple iPhones and iPads as well as Android tablets.

The company is also improving its user guide and constantly adding new titles to its video-on-demand service. For the time being, it does not see Netflix or any other Internet-based TV service as a threat.

"I think even Netflix on their own call felt that they were more complementary than anything else to the existing marketplace," Brian Roberts, Comcast CEO said during the conference call. "I think you are also seeing an expansion of usage as you can use more devices. We are very excited about devices like the iPad. It gives us a chance to now start from scratch with a user interface that is using Web technology, not cable box technology." http://news.cnet.com

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