MediaFile

The high costs of the cloud

How great is it that high-definition video is now portable? Thanks to cloud computing, superfast 4G networks and tablets with high-resolution screens, we can watch thousands of movies and TV shows in lush, beautiful clarity wherever we go.

In a way, that is pretty great, as the millions of people who have bought the new iPad with retina display and LTE connections have already seen. But in another way, it’s going to quickly become not so great: As hi-def video – or rather, the data bandwidth to deliver it – becomes a commodity for more people, that commodity will start to become much more expensive. Not just for consumers, but for the companies that will increasingly need more wireless spectrum and wired infrastructure to handle the surge in data demand.

Call it the curse of the cloud. The proliferation of online video services and portable devices to watch them on have added congestion to data networks even as wireless carriers impose fees on its biggest data users. According to Bytemobile, video accounted for half of all mobile data traffic in February, up from 40 percent only a year earlier.

And that was before the arrival of the new iPad, which has four times as many pixels as the iPad 2. More pixels can enhance hi-def video but requires more data. Demand for wireless data will rise even higher once more LTE smartphones – including, most likely, the iPhone 5 expected this year – start streaming video and other high-bandwidth content on them. If carriers are overwhelmed by the demand, as AT&T was with its notoriously unreliable 3G networks, wireless service will grow more spotty over time. But we’ll be paying more for it.

We’re already seeing some of this happening with the LTE iPads. Just ask the guy who used his brand new iPad to watch NCAA games while attending NCAA games, blowing through his 2GB allotment in less than two days. Or the USA Today columnist who says he did the same just by downloading apps. Meanwhile, complaints were surfacing on message boards that AT&T’s LTE networks were dragging in some urban areas as people played with their new iPads.

In Super Bowl streaming deal, Verizon scores again

What a delightful week this is turning out to be for Verizon. First, archrival AT&T decides it will ditch its $39 billion bid for T-Mobile USA (as if they weren’t grinning madly in the halls of Verizon’s Art Deco building down on West Street) and then they get a piece of this NBC deal to stream the Super Bowl.  No doubt, in the greater scheme of things the AT&T news trumps the streaming deal — but every little thing helps in the crazy competitive telecoms world.

Here’s the upshot: For the first time NFL postseason games — including the Super Bowl — will be streamed live online over NFL.com and NBCSports.com and over mobile devices through an app supplied by Verizon.  This is NBC’s deal;  Fox tells us they have “no similar plans” while we’re CBS declined to comment on whether they would do a streaming deal..

The advantage for Verizon is clear: It’s just one more differentiator. (Verizon has really been on a roll lately. Beyond the events mentioned above, they swooped in to buy a ton of cable spectrum for $3.6 billion and made headlines with their plans to take on Netflix with a streaming service).

Tech wrap: AT&T, T-Mobile pull plug on mega-merger

AT&T said it had agreed with Deutsche Telekom to drop its $39 billion bid to buy the German company’s U.S. wireless unit amid increasing regulatory obstacles to the planned deal. AT&T said in a statement on Monday that it will enter a roaming agreement with Deutsche Telekom. AT&T’s plan to buy T-Mobile USA, first announced in March, has met with opposition from the U.S. Department of Justice and the Federal Communications Commission.

The upstart wireless company that is being bankrolled by Philip Falcone’s $5 billion Harbinger Capital Partners hedge fund could run out of money during the second quarter of 2012, according to the company’s financial statement. LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital and financing, the statement reviewed by Reuters said.

Prince Alwaleed bin Talal, the Saudi billionaire and an investor in some of the world’s top companies, has bought a stake in microblogging site Twitter for $300 million, gaining another foothold in the global media industry. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, was a secondary market transaction, meaning that Alwaleed and Kingdom bought the Twitter shares from existing shareholders, rather than making a direct investment, according to a person familiar with the matter.

Tech wrap: Twitter sings about new site

Twitter revamped its website to make the microblogging service easier to use and to help companies better showcase their brands. The new version of Twitter features a redesigned look that the company hopes will make it easier to find interesting content on the service, as well as technological improvements that it said will speed up the service. It also features a revamped profile page, in which a company can highlight specific feature, such as videos or photos. Previously, the profile pages displayed a chronological list of the company’s most recent Tweets.

Apple’s next iPad will be available in February, Business Insider’s Jay Yarrow writes, citing Citi analyst Richard Gardner. The new iPad will feature a screen with twice the resolution of the current model, Yarrow adds.

Verizon Wireless blamed technical problems for an outage on its recently launched high-speed, 4G network, which prevented some U.S. customers from accessing the Internet for about 24 hours. It is at least the second outage since Verizon launched its 4G data service. Trade publication FierceWireless said the company had a major service disruption in April.

Verizon, Netflix and those darn bloggers aka Reuters

Lowell McAdam, Verizon CEO

Bear with us a minute while we toot our horn (again) and point to our story on Verizon’s plans to launch an online Netflix competitor next year. Needless to say, we were pleased to get it out there first, but it’s probably unsurprising that Verizon was not ready with a press release as it hammer out deals with programmers.

So it was amusing to hear Verizon Chief Executive Lowell McAdam as he tried to squirm his way around questions about his company’s plans during an interview at the UBS conference.

“I think the jury is out but I do think there is a place for over-the-top here and it will be part of our strategy,” said McAdam.

UPDATE-PayPal tries to lure retailers to mobile app

(Updates to explain “secure element” issue. Changes in bold in paragraphs 10, 11)

Online payments firm PayPal is so keen to get mobile payments off the ground it has taken the unusual step of opening a Manhattan dummy store that demos how the app can be used (pictured at right).

It’s  idea is to demonstrate the application to merchants at the “store” between now and February.

Tech wrap: Groupon rethinks IPO

Groupon called off an IPO roadshow slated for next week because of market volatility, the Wall Street Journal reported. The Internet coupons site is reassessing the timing for an offering on a week-by-week basis, the newspaper added, citing an unidentified source. Some on Wall Street have questioned Groupon’s financial disclosures, while others are concerned the company’s rapid growth is starting to slow in North America. Groupon CEO Andrew Mason sent a memo to employees recently that was widely reported in the media, in which he blasted critics in the press and on Wall Street.

Sprint filed a lawsuit to stop AT&T’s $39 billion purchase of T-Mobile USA in the same federal court that is to hear the Department of Justice’s case opposing the buyout. Sprint said the combination would lead to higher prices for consumers and create a duopoly between AT&T and Verizon Communications. Also, Sprint argued that if the deal goes through, a combined AT&T and T-Mobile would have the ability to use its control over roaming and spectrum, and its increased market position to exclude competitors.

Dell and China’s top search engine Baidu plan to jointly develop tablet computers and mobile phones, targeting the Chinese market dominated by Apple and Lenovo. Dell declined to give a timeline for the launch of the devices, but local media quoted sources saying that it may be as early as November. Baidu launched a new mobile application platform last week and offered a glimpse of its upcoming mobile operating system, which it hopes will serve a growing number of users accessing the Internet from smartphones and tablet computers.

Tech wrap: Is Groupon’s IPO window closing?

As the Nasdaq Composite index continued its week-long tailspin, tech investors and analysts are wondering what the stock plunge could mean for the pending IPOs of companies like Groupon and Zynga.

The coming week, which has about a dozen IPOs scheduled to price, will be a good test of the severity of the selloff, according to Nick Einhorn, an analyst at Connecticut-based IPO research house Renaissance Capital. “Less mature, less profitable companies could have a tougher time going public,” Einhorn told Reuters.

If there was to be another recession, writes Investor Place’s Tom Taulli, “the IPO market will freeze up. It will mostly be only standout companies – such as Zynga and Facebook – that will get traction. A company like Groupon, which has substantial losses, may have to delay its offering or cut the valuation.”

Verizon Strike: Service vs. Smiles and duct tape

Verizon is on strike so this is the quick fix.

Gosh, those Verizon guys who can’t fix anything sure are nice.

Two days after Mother Nature snapped the data cable that runs 25 feet from the street to my home  — severing the home phone connection that I barely use — they rang my bell and greeted me with smiles. You heard right: smiles.

Next came a pair of handshakes with uncalloused hands, then introductions, a declaration, and a revelation: “I’m Jim, and he’s Steve. We are managers! There’s a strike!”

Me: “A strike? Really? I didn’t know that.”
Jim: “Yeah neither did we, until we got the call at about 12:15 AM.”
(I begin to wonder if the “Brand Spanking New” tag are still attached to their unscuffed hardhats. )

Tech wrap: Fake Apple Store defiant

Customers at an apparent Apple Store in the Chinese city of Kunming berated staff and demanded refunds after the shop was revealed to be an elaborate fake, sparking a media and Internet frenzy. Staff were also angry at the unwanted attention after more than 1,000 media outlets picked up the story and pictures of the store from the BirdAbroad blog. Apple declined to comment on the fake store or others like it dotted around China.

Apple was in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying.

Verizon Wireless signed up 1.3 million fewer iPhone customers than AT&T and Verizon Wireless customers spent less per month than expected in the second quarter, disappointing Wall Street. While Verizon Wireless added three times more net subscribers in the quarter than AT&T, it only activated 2.3 million Apple iPhones compared with 3.6 million activations at AT&T.