Verizon Communications is engaged in discussions with content providers to deliver web-based TV services to mobile platforms, chief executive Lowell McAdam, said at an investor conference earlier in the week.
Just recently, Dish Network Corp and Walt Disney Co announced a landmark deal that will allow the No. 2 satellite TV provider to deliver Disney-owned network content online, outside of a traditional TV subscription.
Verizon’s goal “is to work with the content providers,” said
McAdam at the Morgan Stanley Technology, Media & Telecom Conference.
“I have personally had discussions with the CEOs of the large content companies, and we would love to partner with them to see how we can take FiOS contact mobilely across the country.” he said.
McAdam said the company could also look at providing a service delivered over wireless airwaves and not just broadband.
According to PwC’s annual entertainment and media forecast, North American consumers will spend $6 billion in 2014 on entertainment from services such as Netflix that are offered over the top, meaning they are utilized over a network but not offered by the network operator.
“I think you can actually get a virtuous cycle where broadcast viewing goes up and over-the-top viewing goes up, if you time this properly,” McAdam said.
In January, Verizon acquired Intel Corp’s OnCue service for an undisclosed sum to accelerate its push into next-generation video services, including integrating it with Verizon’s FiOS fiber-based Internet and TV service that has more than 5 million video subscribers, about 5 percent of pay TV households. The company said it was open to providing over-the-top content to any device.
McAdam also stressed that Verizon expects Netflix to pay for faster video delivery as part of a so-called interconnect deal, in an arrangement similar to the one the video provider has made with Comcast Corp.
“I have spoken live and via email with (Netflix CEO) Reed Hastings, and I believe that we will get some sort of an arrangement with them as well,” said McAdam.
The U.S. government has requested a secret surveillance court to allow it to retain telephone metadata for a period beyond the current five-year limit, for use as potential evidence in civil lawsuits regarding the collection of the data.
In June last year, former National Security Agency contractor, Edward Snowden, revealed that the agency was collecting bulk phone records of Verizon customers in the U.S.
The government subsequently confirmed that it had a program for the bulk collection of phone metadata, which triggered a number of privacy law suits in various courts challenging the legality of the NSA program under section 215 of the Patriot Act.
When litigation is pending against a party, or is reasonably anticipated, the party has a duty to preserve relevant information that may be evidence in the case, the Department of Justice stated in a filing Tuesday before the Foreign Intelligence Surveillance Court that was made public Wednesday.
“A party may be exposed to a range of sanctions not only for violating a preservation order, but also for failing to produce relevant evidence when ordered to do so because it destroyed information that it had a duty to preserve,” it wrote, while pointing out that it hasn’t received a specific preservation order so far in any of the civil lawsuits.
The American Civil Liberties Union, U.S. Sen. Rand Paul and the First Unitarian Church of Los Angeles are among those who have filed lawsuits challenging the phone records program.
The telephony metadata retained beyond five years for the purpose of the civil litigation will be kept in a format that prevents access or use of it by NSA staff for any purpose including queries for gathering foreign intelligence information, according to the filing.
The federal government, meanwhile, is exploring alternatives to the NSA’s holding the phone data. It has asked industry for information on whether commercially available services can provide a viable alternative to the government holding the bulk data.
In a review of NSA surveillance last month, President Obama called for a new approach on telephony metadata that will “establish a mechanism that preserves the capabilities we need without the government holding this bulk metadata.”
A cybersecurity firm has stated that it has found stolen credentials from some 360 million accounts that are available for sale on cyber black markets, though it is unsure where they came from or what they can be used to access.
The discovery could represent more of a risk to consumers and companies than stolen credit card data because of the chance the sets of user names and passwords could open the door to online bank accounts, corporate networks, health records and virtually any other type of computer system.
Alex Holden, chief information security officer of Hold Security LLC, said in an interview that his firm obtained the data over the past three weeks, meaning an unprecedented amount of stolen credentials is available for sale underground.
“The sheer volume is overwhelming,” said Holden, whose firm last year helped uncover a major data breach at Adobe Systems Inc in which tens of millions of records were stolen.
Holden said he believes the 360 million records were obtained in separate attacks, including one that yielded some 105 million records, which would make it the largest single credential breaches known to date.
He said he believes the credentials were stolen in breaches that have yet to be publicly reported. The companies attacked may remain unaware until they are notified by third parties who find evidence of the hacking, he said.
“We have staff working around the clock to identify the victims,” he said.
He has not provided any information about the attacks to other cybersecurity firms or authorities but intends to alert the companies involved if his staff can identify them.
The massive trove of credentials includes user names, which are typically email addresses, and passwords that in most cases are in unencrypted text. Holden said that in contrast, the Adobe breach, which he uncovered in October 2013, yielded tens of millions of records that had encrypted passwords, which made it more difficult for hackers to use them.
The email addresses are from major providers such as AOL Inc, Google Inc, Microsoft Corp and Yahoo Inc and almost all Fortune 500 companies and nonprofit organizations. Holden said he alerted one major email provider that is a client, but he declined to identify the company, citing a nondisclosure agreement.
Heather Bearfield, who runs the cybersecurity practice for accounting firm Marcum LLP, said she had no information about the information that Hold Security uncovered but that it was plausible for hackers to obtain such a large amount of data because these breaches are on the rise.
She said hackers can do far more harm with stolen credentials than with stolen payment cards, particularly when people use the same login and password for multiple accounts.
“They can get access to your actual bank account. That is huge,” Bearfield said. “That is not necessarily recoverable funds.”
After recent payment-card data breaches, including one at U.S. retailer Target, credit card companies stressed that consumers bear little risk because they are refunded rapidly for fraud losses.
Wade Baker, a data breach investigator with Verizon Communications Inc, said that the number of attacks targeting payment cards through point-of-sales systems peaked in 2011. That was partly because banks and retailers have gotten better at identifying that type of breach and quickly moving to prevent crooks from making fraudulent transactions, he said.
In addition to the 360 million credentials, the criminals are selling some 1.25 billion email addresses, which would be of interest to spammers, Hold Security said in a statement on its website.
Still, Verizon has had its own interconnection discussions with Netflix related to increasing the video provider’s traffic speeds on the broadband carrier’s networks, Verizon Chairman and CEO Lowell McAdam said. Following a Sunday announcement that Comcast and Netflix had reached an interconnection deal, McAdam said his company has had similar discussions with the video provider.
The Comcast and Netflix deal shows “the commercial markets can come to agreement on these to make sure the investments keep flowing,” McAdam said.
McAdam addressed the U.S. Federal Communications Commission’s proposed net neutrality rules during a conference call about the company’s acquisition of Vodafone’s 45 percent stake in Verizon Wireless. The FCC’s move this month to resurrect net neutrality rules should provide “clarity” for the broadband industry, said McAdam, whose company successfully challenged an old version of the regulations in court.
McAdam dismissed concerns that his company would selectively block or slow some Web content. “We make our money by carrying traffic,” he said. “That’s how we make dollars. So to view that we’re going to be advantaging one over the other really is a lot of histrionics, I think, at this point.”
But McAdam suggested that broadband power users should pay extra. “It’s only natural that the heavy users help contribute to the investment to keep the Web healthy,” he said. “That is the most important concept of net neutrality.”
The FCC needs to look at the broad Internet industry, not just broadband providers, when it considers new net neutrality rules, McAdam said. Companies like Netflix, Apple, Microsoft and Google have a role, and “any rules will have to include all of these players,” he said.
McAdam called for the FCC to create “light touch” rules on net neutrality. The FCC needs to consider growing uses of broadband in medicine and other fields, he said. “Everything from health care to telematics to the energy grid need to be balanced with someone who’s trying to watch last year’s episode of [TV show] NCIS,” he said.
McAdam said he’s “encouraged” that the latest FCC effort may bring clarity on net neutrality rules.
AT&T shares closed down 4 percent a day after the No. 2 U.S. mobile services provider slashed the monthly fee for a data plan from $40 to $15.
Some analysts saw the price cut as a drastic step that could force rivals such as Verizon Communications to response with their own price cuts and, as a result, hurt profits across the industry. AT&T and T-Mobile have been at each other’s throats for months, with offers aimed at each other’s customers, but many analysts had hoped that fight would be contained.
Shares in Verizon fell 3 percent, as did No. 4 operator T-Mobile US shares, and Sprint stock ended down 5 percent after AT&T’s move on Sunday.
“Now we’re seeing real evidence of increasing competition having real cost to the industry,” said Jonathan Chaplin, a New Street Research analyst who saw the price cut as a sign that AT&T’s recent efforts to regain market share lost to T-Mobile had not been successful.
“It makes investors worry the market is really in trouble.”
AT&T lowered its monthly fee for a 10 gigabytes monthly data share plan aimed at families to $15 per device, from $40.
Chaplin expects the price cut to shave a relatively modest 0.5 percent to 1 percent off his previous estimate for AT&T 2014 earnings before interest, tax, depreciation and amortization of $42.7 billion and a 1 to 2 percent cut to his 2015 EBITDA estimate of $43.3 billion.
But he sees the move as only one step in what could result in a bigger decline in prices across the industry.
“If this was the end, we wouldn’t care and neither would the market,” Chaplin said, but added: “World War I started with one archduke getting assassinated.”
The competitive pressure started with aggressive discounts by market laggard T-Mobile last year, which helped the company report three quarters of customer growth after four years of losses, mainly at AT&T’s expense.
AT&T countered on January 3 by offering to pay consumers to switch from T-Mobile, while No. 3-ranked Sprint promised big discounts for family and friend groups days later. T-Mobile then upped the ante with an offer to cover the hefty exit costs for consumers switching to its service.
T-Mobile’s announcement last month “may have pushed AT&T too hard,” making it fight back, J.P. Morgan Securities analyst Philip Cusick said on Monday.
“The back and forth in price cuts is a negative for the entire wireless industry,” J.P. Morgan’s Cusick said.
Some analysts had hoped that at least Verizon could stay above the battle, but Jefferies & Co analyst Mike McCormack said on Monday that AT&T’s new pricing plan also targets Verizon’s “prized” family plan customers.
McCormack said it was unlikely that Verizon would respond with service price discounts. But others were less convinced, as Verizon Chief Financial Officer Fran Shammo said this month that his company would react to competition when required.
“(Verizon) will be the one to watch, in our view as they have been on record saying it would react to price moves if they felt the need,” Wells Fargo Securities analyst Jennifer Fritzsche wrote in a research note.
A Verizon Wireless spokesperson said that the company does not comment on its competitors plans.
Family plans can save money in traditional households of three or more people, but 60 percent of all U.S. households have only one or two people, and those are the fastest-growing kind, Sprint CEO Dan Hesse told the Citi 2014 Internet, Media & Telecommunications Conference taking place near International CES in Las Vegas. The Framily Plan, available starting Jan. 10, is designed for them.
Members of a “framily” won’t share a pool of data or receive a single bill, but they will pay less per month. The first subscriber will pay $55 per month for unlimited talk and text and 1GB of data, and every time another person joins, each member’s bill will go down by $5 per month. As many as 10 people can join a framily, but the maximum savings is $30 per month, bringing each member’s monthly bill to $25 plus taxes and surcharges. Then, any member who wants unlimited data instead of the 1GB limit can pay an extra $20 per month.
Buying a phone is separate from the Framily Plan. Subscribers have to either bring their own device or buy it from Sprint in installments. Those who upgrade to unlimited data will also be entitled to an annual upgrade to a new device.
Sprint’s new offer comes amid an upheaval in the ways U.S. consumers can buy devices and pay for mobile service. Unlike traditional family plans, the Framily Plan could bring a wide range of friends and acquaintances of Sprint subscribers into the company’s fold. Following its acquisition last year by Softbank, Sprint is still much smaller than AT&T or Verizon Wireless and looking to make up for subscribers lost during the shutdown of the former Nextel network last year.
The company, the No. 4 U.S. mobile operator, promised payments of up to $350 per line to consumers who break their contract with any of its bigger rivals and switch to T-Mobile.
The offer came just days after AT&T Inc promised a $200 credit to T-Mobile customers who switch. While AT&T also offered up to $250 for switching customers who trade in their phone, T-Mobile said it would pay up to $300 for trade-ins.
The companies have been targeting each other because they use the same network technology, making it easy for consumers to bring their phone when they switch, but some on Wall Street are concerned they will cause an industry-wide price war.
T-Mobile said it hoped that whole families as well as individuals would switch to its service in response to the new cash offer, which is aimed at covering early contract termination fees typically charged by wireless operators.
John Legere, the outspoken chief executive of T-Mobile, said he hoped the offer would end the “industry scam” of family plans, which tie entire families into long-term contracts.
Legere joked that AT&T’s recent offer would actually play to T-Mobile’s advantage because it would allow AT&T customers to try a different service with less financial risk than before.
“If it doesn’t work they’ll pay you to come back,” Legere said in announcing the offer at the Consumer Electronics Show in Las Vegas.
T-Mobile, which is 67 percent owned by Deutsche Telekom, managed to turn the corner on four years of customers losses in 2013 by criticizing its rivals and promoting its service plans as being more flexible and consumer friendly.
It said it added 1.645 million net customers in the fourth quarter, up from 1.023 million in the quarter before, marking its third quarter of customer growth for 2013.
The fourth-quarter additions included 869,000 valuable post-paid customers, which was up 13 percent from the third quarter, according to the company.
It said customer defections, known in the industry as churn, stayed at third-quarter levels of 1.7 percent and compared with 2.5 percent in the fourth quarter of 2012.
KnowMyApp.org, launched by CTIA late last week, allows mobile device owners to estimate an app’s data usage before it’s downloaded. This is the first tool allowing consumers to learn about an app’s data usage before downloading it, although there are tools available to measure an app’s data use after downloading, CTIA said.
CTIA has also aimed KnowMyApp.org at app developers, by giving them information about conserving data usage and minimizing impact to battery life, the trade group said.
Visitors to the website can search by app name, operating system or app categories. They can learn now the app was tested, how much data is used when an app is downloaded, at initialization, during active run time and during background time.
The website also includes information about how mobile device owners can conserve data.
KnowMyApp.org currently includes test results for the top 50 paid and free apps from the Apple and Google stores, and CTIA plans to add more apps each month. The trade group invites developers to submit apps to be tested.
The tool was developed through the CTIA’s Application Data Usage Working Group, with members including Apple, AT&T, Ericsson, HTC America, Microsoft, Sprint and Verizon Wireless. Intertek developed the mobile app data usage benchmark testing using the AT&T Application Resource Optimizer, an open-source diagnostic tool that captures, analyzes and reports network app data usage to help developers create more efficient apps.
Japan’s SoftBank and German telecom operator Deutsche Telekom are close to a deal that would merge T-Mobile US with Sprint, eliminating one of the four major mobile competitors in the U.S., according to the Nikkei news agency.
SoftBank would pay more than 2 trillion yen ($19 billion) for a stake of up to 70 percent in T-Mobile, which is the fourth-largest mobile operator in the U.S.,Nikkei said, citing unnamed sources. SoftBank already owns a majority of Sprint, the country’s third-largest carrier. T-Mobile is majority owned by Deutsche Telekom.
The Wall Street Journal had reported earlier this month that Sprint was studying regulatory concerns about such a deal and might make an offer for T-Mobile in the first half of next year. The Nikkei story, posted on Wednesday in Japan, said the parent companies of Sprint and T-Mobile were in the final stages of talks on a possible deal. SoftBank might make its offer as early as spring 2014, Nikkei said, roughly matching the earlier report on timing.
A $19 billion price tag for T-Mobile would nearly equal the $21.6 billion that SoftBank paid for 78 percent of Sprint earlier this year.
Combining Sprint and T-Mobile would create a carrier with nearly 100 million customers, close to subscriber parity with AT&T and Verizon Wireless, each of which has more than 100 million. However, U.S. regulators might block such a transaction in order to preserve competition in the nation’s wireless industry. When the government shot down AT&T’s proposed takeover of T-Mobile in 2011, some regulators cited the need to keep four major rivals in the market.
T-Mobile has proved a scrappy competitor since emerging from the failed AT&T deal. In the past year, in a successful bid to make gains against its bigger rivals, the company has introduced new service and device-purchase plans that other U.S. carriers have emulated.
The No. 4 carrier sent invitations to reporters Friday for a CES press conference Jan. 8.
“This one you aren’t going to believe,” the invitation read over the number “4.0″ in the background.
T-Mobile has been using such numbers to refer to successive iterations of its business strategy, dubbed “un-carrier” by CEO John Legere.
Legere is seeking to boost T-Mobile’s share of the U.S. market by attempting to woo customers with pricing and services that are different from its bigger competitors: AT&T, Verizon and Sprint.
So far, the company has simplified pricing plans, done away with phone subsidies, begun offering free international data roaming over 2G networks and said it will offer 200MB of data per month over its 4G LTE network at no charge to tablet PC users who sign up for a Mobile Internet account.
No further details of the company’s CES announcement were immediately available.
In the last week, several news reports said number-three carrier Sprint isconsidering an acquisition of T-Mobile USA. Sprint was acquired itself earlier this year by Japan’s SoftBank.
The growth of online video, both in fixed and mobile networks has made content delivery networks such as EdgeCast and the services they offer more interesting. Verizon’s Digital Media Services unit will integrate EdgeCast’s capabilities to further improve “ability to meet the exponential growth in online digital media content, as well as broaden its portfolio of site acceleration services for enterprises,” the operator said earlier this week.
With the acquisition, Verizon will get its hands on EdgeCast’s content delivery network, a global network of servers that can be used to handle traffic spikes, stream content to thousands of viewers concurrently, or secure websites from attacks, according to EdgeCast.
This isn’t the first time this year Verizon has opened its wallet to improve its video distribution capabilities. Last month, Verizon announced the acquisition of technology from upLynk that streamlines the process of uploading and encoding video for live, linear and video-on-demand content.
EdgeCast’s list of customers includes Pinterest, Kellogg’s, Mercedes, Yahoo and WordPress.
The financial details of the deal were not revealed, but Verizon’s and EdgeCast’s board of directors have approved the acquisition and Verizon hopes to finalize it early next year, it said. Once the deal is complete, Verizon will compete with the likes of Akamai Technologies.
Today, online video is the biggest contributor to mobile traffic volumes, constituting 25% of total smartphone traffic and 40% of total tablet traffic, according to a recent report from telecom vendor Ericsson.
The rising number of smartphone subscriptions is the main driver for mobile-data traffic growth in the coming years. Users consuming more data per subscription — mainly driven by video — is adding to this. A compound annual growth rate of around 45% for data traffic is expected between 2013 and 2019 or by a factor of 10 during the whole period, Ericsson said.
Nokia Solutions and Networks (NSN) and Korean operator SK Telecom have shown the potential for virtualizing the core of a mobile network, which will make it easier for operators to roll out new services.
Virtualization and cloud-based services have changed enterprise systems’ architecture and management. Mobile operators’ desire for the same advantages in their networks has given rise to the concept of NFV (network functions virtualization).
The goal is to move away from the proprietary and expensive equipment operators use today and instead adopt a more cloud-based infrastructure that allows them to be more flexible and use commodity hardware. That could, in turn, allow operators to cut costs and roll out services faster, according to Nokia, and that should be a boon for users, as well.
Moving to a whole new way of building the networks operators rely on to offer telephony and mobile broadband isn’t going to happen overnight. But even if it’s still early days, vendors have to show they are current with this idea, according to Sylvain Fabre, research director at Gartner.
Nokia and SK Telecom’s joint proof-of-concept focused on virtualizing the so-called Evolved Packet Core (EPC), and they were able to successfully control capacity for both throughput and signaling traffic based on smartphone usage patterns, Nokia said Monday.
SK Telecom is not the only vendor interested in NFV. Last year representatives from 13 operators — including Verizon, China Mobile and Deutsche Telekom — came together to write a white paper on the topic.
Because there is great interest from operators, the vendors can’t ignore NFV even if a move to a more open network would open the door for new competitors in the network infrastructure sector, according to Fabre.
Twitter Inc announced that it would introduce self-serve ads for small- and medium-sized businesses in three countries outside the United States, marking one of its first moves to expand revenue as a publicly listed company.
Businesses in the United Kingdom, Ireland and Canada will be able to buy “promoted” ads that can be shown to targeted Twitter users, the company said.
Twitter held a successful initial public offering last week that raised $1.8 billion. Its stock price has since soared, implying a market capitalization of more than $24 billion.
Twitter, which made $317 million in revenue in 2012, generates the majority of its sales through selling ad packages directly to large companies and international brands such as Verizon Communications Inc or Samsung Electronics Co Ltd. But analysts believe it has the potential to greatly boost sales by letting smaller businesses buy automated ads without the help of Twitter salespeople.
Google Inc, for instance, became an online advertising powerhouse by automating its ad-buying capabilities for small- and medium-sized business.
Twitter gave U.S. businesses early access to the self-serve program earlier this year. The company has said it intends to eventually roll out the program around the world.
Analysts expect Twitter to make more than $1.1 billion in 2014 revenue, according to Thomson Reuters data.
AT&T and Verizon Wireless both said they won’t charge wireless customers for calls and texts from the U.S. to the Philippines over the next few weeks to aid in relief efforts in the wake of Typhoon Haiyan.
Verizon also said it is giving $100,000 to the American Red Cross Philippines Typhoon Appeal Fund, while AT&T is giving $25,000 to AmeriCares for relief and Sprint is giving $25,000 to the American Red Cross. Those efforts come amid reports of food and water shortages after the typhoon swept through the island nation last week. Nearly 2,000 people have been confirmed dead; that number is expected to rise further.
Verizon said it is going to waive charges for wireless calls, texts and multimedia messages to and from the Philippines from Nov. 8 to Dec. 7 and for all wired long-distance calls to the Philippines during that period. The waiver applies to conventional “post-pay” customers that make up the majority of the subscribers.
Earlier Tuesday, AT&T said that customers on its post-paid plans will not be charged for calls or texts from Nov. 8 to Nov. 30. AT&T’s wired customers, including those on its U-verse service, will not be charged for up to 60 minutes of direct-dial calling to the Philippines for the same dates. They will either see no charge for the calls on their monthly statements or receive a credit in a later statement.
AT&T wireless customers can text to give a $10 donation to four different groups by texting the word “AID” to the following: 50555 to donate to Operation USA; 80077 to give to HOPE Worldwide; 27722 to give to World Food Program USA; and 80108 to give to mGive Foundation Philippines Typhoon Relief Fund (a U.S. State Department campaign).
Verizon also said it has activated a text-to-donate program for its U.S. customers to donate $10 to three groups. To donate to World Vision, text: HOPE to 777444; to donate to UNICEF, text: RELIEF to 864233; and to donate to Catholic Relief Services, text: RELIEF to 25383.
AT&T will launch the Samsung Galaxy S 4 Zoom on Friday, Nov. 8, while Motorola is teasing the Moto G for Nov. 13.
The 4.3-in. Zoom will cost $199.99 with a two-year pact, or $25 a month on installment, AT&T announced. It runs Android Jelly Bean over 4G LTE and features a 16-megapixel camera with 10x optical zoom on the rear. There’s also a 1.9 megapixel front camera.
Samsung specs show the Zoom has a Pega dual-core chip and a 2330 mAh battery.
The Moto G is reportedly a low-priced entry-level version of the Moto X, which sells as a developer edition, unlocked, for $650.
All Motorola would say in a graphic of the globe emblazoned with a Motorola brand “M” was “Save the Date, 13 November 2013.” The globe likely indicates a global launch.
Some reports, including at Android and me, indicate the Moto G could have an unlocked price $215, even with a quad-core processor.
Last week, Sprint announced four new smartphones, including three for Nov. 8: the Samsung Galaxy Mega for $199.99 and the Galaxy S 4 mini for $99.99, as well as the LG G2 for $199.99. The HTC One max will also be available soon for $249.99, Sprint said.