Alec Saunders SquawkBox

Overstating a position always carries a risk.  The risk is that you might get called on it.

AT&T lobbyist Jim Cicconi is suggesting that Iowa RLEC's free calling schemes could cost the company a quarter billion dollars per year. Let's look at the facts. 

• There are a few more than 150 Iowa RLECs. 
• AT&T is suing exactly five of them in court. 
• Seven of the RLECs affected by AT&T's bully tactics have gotten together and counter-sued… for $10 million in lost revenues.  That represents about 4 months of revenue. 

So, what's the story Jim?  Let me guess… you're playing nice with the other 140 or so companies that are really costing you over $200 million, 'cause the guys you've filed suit against sure aren't.

A lawyer would describe Jim's statements as "unsubstantiated".  That's a polite way of saying "what a load of bull".

Really cool mobile data applications pop up all the time in Europe, the US, and Asia.  Canadians never seem to use them though.  Ever wonder why?  I'll give you a hint… wireless data plans are outrageously expensive here. 

Here's a chart, courtesy of ThomasPurves.com, which will show you just how expensive.  That's right, the cost to transfer 500M of data on Rogers is $1600.  The first 200 megs are $100, and then after that the price rises to a steep $5/M.   By jacking the price sky high on overage, the carrier can earn fat profits from the heaviest users.  Pretty nifty trick, isn't it?

In the late 1990's, at the beginning of the broadband era, Strategic News Service chief Mark Anderson coined the term Always On, Real Time Access (AORTA) to describe always connected access to the internet. Mark's vision is just now becoming real, although perhaps not the way he thought it would. Although PC's may be always on and always connected, PC's are only useful when you are near them.  Mobile devices are with you at all times.  It's the experience of the mobile device that is the realization of Marks' AORTA vision. 

The Twitter vs Jaiku brouhaha is a useful conversation in as much as it highlights the differences between mobile experiences and desktop experiences and the people creating them.  Joi Ito characterizes the differences as:

Jaiku is a bunch of Helsinki mobile jocks getting into the Web 2.0 of it all whereas Twitter is the Web 2.0 crowd "getting" co-presence.

Not enough people really get it, however.  I chatted with an individual at Microsoft last week, for instance, who bemoaned the lack of depth in their mobile presence experience.  Too PC-like, was the implied message. Another handset manufacturer opined that mobile presence was really "Google Talk on the handset". At the other end of the spectrum were the team from an unnamed large portal player who dined with me on Thursday night, and offered the view that mobile presence was gathering and displaying all of the carrier "presence" information available.  Think Twitter or Jaiku with the addition of location, on-hook / off-hook, on-net / off-net and so on.

I'm fairly certain that none of these is an experience that I want. I need to be able to dip into and step out of the presence flow, as Stowe Boyd refers to it, on an as needed basis.  In fact, I want my phone to do that for me automatically, and I want it to highlight the important stuff.  I don't want a repeat of my experience over dinner last Thursday night, when I had to shut my phone down as the torrent of tweets from Twitter became unmanageable.  It was just an annoyance.  Twitter works for me with GoogleTalk on my desktop, but it's very intrusive on my phone. Before I can use it on my phone, I have to have better tools for managing it.

At iotum, we've described that mobile presence vision as New Presence. The Twitter / Jaiku concept of message flow has a place in that vision, to be sure.  One of the key ideas of New Presence, however, is managing that flow of presence intelligently instead of downloading the interpretation of that mass of data to the user.  It's that management capability that makes iotum's Talk-Now application attractive to the people use it.

The technologies of mobile devices and desktop devices are becoming more similar, to be sure. For example, the Nokia N95, which I've been playing with all weekend, has a large and bright screen, and Wifi or HSDPA connectivity.  The applications in it include a media player, photography, mapping, games, a small office suite, calendar, address book, and so on. It's an integrated content consumption and creation tool, with productivity features, and you can talk on it.  You can do the same with a PC, right?  But a PC isn't mobile, and mobility really does differ from the desktop.

Here are five ways that mobility will change our world, forever.

1. Although social networking applications emerged on the web, they belong on mobile handsets.  Mobile handsets are the natural choice for creating communities, and user generated content.  Mobile presence is going to be a key element.
2. Search is going to be a key feature of mobile handsets as well.  Yes, today you can jump to your favorite search engine using whatever browser is on the handset, but web search is a pain to use from a handset. What's really needed is the ability to intelligently sort and manage that data directly from the handset.  How much more ad revenue could Google generate if it delivered a compelling search experience at the point of purchase?
3. Handsets, applications and services, because they are with the user at all times, will become aware of the users environment and activity, and adapt themselves with that knowledge.  You see simple examples of this today.  The RIM BlackBerry, for instance, knows when it has been holstered, and automatically sets itself to another profile.  When will a handset know that the most appropriate modality for a conversation at a particular time is text rather than voice, or that voice commands are the best interaction mode while you're in your car?  Answer: when that handset is tied to an intelligent mobile presence engine.  It's the world Jim Courtney describes in his Interruption 2.0 Manifesto. 
4. Similarly, the context information available from the handset is now a driver for a whole new generation of services. How much richer the context information that exists in your handset compared to anything that Google exploits today! How long until we have a carrier dependent on advertising revenue?  Prediction: it will take a carrier with a strong presence infrastructure (think beyond OMA IMPS, please) before this can happen. 
5. And what will be the impact of billions of embedded nodes attached to the global internet? Think content creation / consumption and sharing on a scale that the web has never conceived.  And imagine what that world will be like without intelligent ways to manage that flow.  The minor annoyances of being hyper-tweeted over dinner the other night will be small, compared to this new world. 

New Presence is a vision for presence in a mobile world, as distinct from the desktop.  Twitter vs Jaiku is merely the opening act, and whether it's the Helsinki geeks or the Silicon Valley geeks driving,  mobility will redefine the experience of the web in ways that we've only just begun to imagine.

I love a good fight, especially when there's a clear bully and the bully takes a pasting.  In the  David and Goliath match-up of AT&T versus the Iowa rural telcos, I'm rooting for the little guys. 

Last week I had a chance to chat with FreeConferenceCall.com CEO Dave Erickson, and his attorney Jon Canis about how the actions of the large incumbents are affecting his business, and what they plan to do about it.  It's a fascinating glimpse into the internecine world of telecom regulation and the relationship been the incumbents, and competitive service providers.  It's a story of abuse, illegal behaviour, and harrassment by large bullies intent on crippling small businesses.

For Dave Erickson, the nightmare began March 9, when Cingular (AT&T wireless) blocked all calls to his Iowa numbers.  Callers would receive a message advising them to call 611, where Cingular's unchecked and uninformed customer service department advised callers that "Free Conference is a fraud", or "Free Conference is blocking your call", or "Free Conference costs too much".  Calls were blocked until the night of April 2.

Moreover, it wasn't just Cingular, but also Nextel, Sprint and Qwest blocking.  More insidious than Cingular's blatant behaviour, the others blocked calls sporadically — a strategy designed to convince customers that Free Conference's service was faulty and reliable.

According to Jon Canis, this is simply a fight about access charges.  It's been going on sporadically for some time, but really ratcheted up about four months ago when AT&T began withholding access charges billed by rural telcos in Iowa.  Within sixty days, the other Bells did the same, in an apparent act of collusion with AT&T. 

Canis' firm, Kelley Drye and Warren has initiated a collection action on behalf of seven of the small telcos.  Their case is pretty simple.  Existing precedents bar all forms of "self help". The big guys have to take their case to the FCC.  They can't just refuse to pay bills.  And even more important, forty years of legal precedent says that they can't just turn off service to rural exchanges arbitrarily.  According to Canis (who ought to know, having represented 30 CLECS five years ago in a similar situation), that's the law.  The US economy cannot function if carriers can arbitrarily cut other carriers' service off.

The most egregious element of this whole thing?  AT&T apparently made this decision without examining the traffic in question.  Canis claims that less than 5% of the traffic to these iowa exchanges is international reorigination. The other 95% is domestic traffic to businesses like his client FreeConferenceCall and other established traditional businesses.  Even so, no matter the traffic, carriers don't have the right to decide not to terminate it in Iowa without gaining the support of the FCC.

To date, the Iowa attorney general has received several hundred complaints.  Local councils are talking to the Iowa Utilities Board, and FreeConferenceCall has put up a blog to tell their story and answer customer questions. And, on the 19th and 20th of this month, the FCC Commissioners have agreed to meet with CEOs of several of the companies affected.  "We will use this series of meetings with them individually to describe our concerns and how we'd like the FCC to respond", said Canis. FCC staff have offered to mediate, but Canis is hoping for a faster resolution.  He cites the case of Madison River, where the local rural telco was blocking Vonage traffic.  The FCC initiated a motion of its own, sent a letter of investigation, and within 3 weeks had a negotiated consent decree.

The situation is quite analagous to the IP telephony carriers unlimited plans. IP Telephony companies use statistical models to compute the average usage of a customer, and then offer "unlimited" minute plans knowing that most customers will use the average amount.  If their calculations are inaccurate, then they must absorb the losses.  These wildly popular marketing plans have garnered customers and revenues for them in what looked like a stagnant market – residential telephony.  Similarly, the enormously successful nationwide calling plans offered by cellular providers like AT&T assume an average termination cost.  AT&T knows the termination costs for every exchange it serves, and it knows the traffic patterns.  If AT&T's calculations are inaccurate, then they must absorb the losses. 

And that's the nub of the problem. By throwing its weight around, AT&T is trying to bully the small carriers in Iowa into absorbing the expense of its super successful nationwide long distance marketing plan. Doesn't seem quite fair, does it?  It's a bit like Rockefeller's Standard Oil negotiating kick backs on every barrel of oil shipped, whether it pumped by them or not.

Meanwhile, guys like Dave Erickson keep trying to serve customers and keep their businesses up and running despite ongoing and apparently illegal harrassment and abuse from much larger competitors. 

UPDATE: Some of the best coverage of this whole story is GigaOm's series by Paul Kapustka.