New York Times picks up on something that ThirdPipe has been noting for 2 years now. The generational shift of younger citizens to be 100% cell based communicators. Their only landline tie being cable for high speed internet access. Some interesting numbers —

Still have a landline? You’re showing your age. The young, hip, cool people have cellphones only, and that is bad news for traditional phone providers. In a survey of Internet users, JupiterResearch found that 12 percent “do not subscribe to fixed voice service, and nearly two-thirds of them are ages 18 to 34.”

It is true that 70 percent of online users still have fixed lines in their homes provided by a telecommunications company. Fifteen percent receive fixed-line service from a cable company (cable providers are attracting customers with “bundled” offers) and 3 percent from an Internet-based service provider.

The trouble for the Telcos is that as time marches on there is an abandonment of already paid for physical plant. And sad as it might be that they could provide advanced telcom service cheaply over the existing copper the tide is against them. The wireless technology is not standing still and its bandwidth capabilities are on par today with the low end of a DSL line. That will only increase over time. The last nail in the coffin is the fact that this wireless generation, weaned of the wired phone, will see no need for it — ever.

Linky

Well Nortel’s quarterly results are in and the results are below analysts expectations. Then always seems to be a ongoing theme with Nortel. Seems about every 5 years or so they take their eye off market changes and have to knock heads to get back in the game. –

The value of Nortel Networks Corp.’s stock was cut in half after the company announced a restructuring, including plans to sell off its Metro Ethernet Networks business and “mitigate the risks” in its LTE, 4G effort. Market watchers took the language to indicate hopes for a potential teaming with another wireless infrastructure company.

The news coincided with a preview of Nortel’s third quarter; the company expects revenues of about $2.3 billion and gross margin of 39%, numbers down from previous expectations. Nortel blamed the drop on the “sustained and expanding” economic downturn as well as “product delivery delays.”

The news is just the latest in a long string of troubling issues at the company. Nortel suffered years of financial difficulties following the tech blowout at the turn of the century. Although things had seemed to turn a corner with the addition of CEO Mike Zafirovski, a mix of sluggish spending and wider, macro-economic troubles have served to pull the company back to the edge.

Nortel’s stock dropped from around $5 per share to around $2.50 per share after the company’s restructuring announcement earlier this week.

Here’s Nortel’s stock over the last 3 months. —

I take particular note over the the phrase ‘mitigate risks in the LTE…’. It would appear that all is not rosy in the LTE development cycle for Nortel. Question is are they solving the issue internally or are they going to go outside and find a partner?

Linky

Well it looks like the merger of VZW and AllTel is nearing its conclusion. Yep with full scale body losses. RIFF. You’re Fired!, Asta la Vista baby. –

According to an Associated Press report, when Verizon Wireless’ purchase of Alltel finalizes, the carrier plans to keep a regional headquarters in Alltel’s base city of Little Rock. However, the existing Alltel headquarters in Little Rock has 3,000 employees. Verizon Wireless will cut that number down to 100, likely getting rid of top executive positions and midlevel positions.

Unemployment scares aren’t in the too-near future though. According to the report, Verizon Wireless President and CEO Lowell McAdam said he hopes for the merger to close by the year’s end, and that staffing decisions wouldn’t be finalized until after that date.

Down to a 100! Lets see what they will keep is the regional regulatory manager, the building maintenance crew, the landscape contractor and the security guards. The last three they keep because they are required to by either union, contract or insurance requirements. Oh the regulatory guy? Well somebody has to smooze with the pols. The rest?– gone. Which is a crying shame. AllTel was a well run company.

Linky.

Well it looks like Google Androids will be in the public venue come September. T-Mobile is rumored to be the first carrier to carry an Android enabled phoneset. –

We’re hearing rumor after rumor that Android has been delayed, and pushed back to 2009. Well TmoNews is jumping into the pool or rumors, calling BS on those other rumors, and putting in our vote of confidence on a presale of the Android phone on September 16th, 2008. This information, coming from a trusted source, prices the Android phone, also known as the G1 (Codename or real name, we’re not sure) at $399.

Full invoice that is.

Scare you? Good, well during the presale of the G1, T-mobile customers can pick up the phone for $150. This is where it gets interesting, we’re not seeing any prices for new activations during the presale, so this could mean that only current T-mobile customers can pick up the G1 during the presale. Other customers interested in the G1 may have to wait until beginning/mid October before a national public launch.

$400 for an advanced phone. Scary? Not one bit in my view. This is the price we should be paying for an advanced phone of this type SO LONG as the carrier is reducing their usage rate on the backend. What is this years $400 wonder is next years $100 commodity. That is the way it is in tech. The early adopters always pay the R&D. The price you pay is dependent on patience. I am fine with that. You should be too.

What is most surprising is that T-Mobile has in a very short period of time gone from a follower to a leader. They dumped ETF’s . They are now going to be the first to introduce Andoid. I wonder what else they have up their sleeves?

Linky.

Using WiMax to offer competitive T-1 and up service levels to business, virtually on demand and at a big discount, Towerstream’s revenues grew by 53% in the last quarter. WiMax enables Towerstream to bypass the telco last mile infrastructure (and the need to lease access), giving the firm a ultimate pricing flexibility and instant deliverability.

CEO Jeff Thompson said: “These strong results reflect the continued maturation of both our newer markets and our sales force.  Over the past 12 months, we have significantly increased the number of account executives and the customer pipelines developed by our expanded sales force is beginning to yield results.  Our Internet-based marketing initiatives, and the success of our mid-range product offering of 8 mbps at $999 per month, are also driving sales growth.” (Firece Broadband Wireless)

Commercial access is one of the telecom guy’s biggest profit makers, with operating margins in excess og 90%. If Towerstream and  others like them continue to make inroads into the commercial access business, the T-1 jackpot will be over.

The plunge is not some new venture but Nortel’s stock price. Friday’s close has their stock down by 15% on a flat 2Q earnings report. The importance of this I will get to in a minute. But first here is the 5 day action last week. –

The consideration? Cisco and Nortel are infrastructure vendors. They have retail presence of course, but the main body of their income streams is selling to corporations. When corporations stop investing due to lessened consumer demand companies like Cisco and Nortel feel the draft. It will be interesting to compare Cisco’s 2Q results.

Now were I a smart Muni looking for a Wifi/Wimax supplier I would be tapping both these firms. They’re going to be hungry and will sweeten the pot and lower their prices. Just like the housing market now is the time to buy network infrastructure.

Linky

The FISA Bill Update has passed the Senate 69-28. That includes the Telecom Immunity portion thereto. This sets a very dangerous precedent. Next you know the Bankers and Realtors will be looking for retroactive immunity from the housing debacle. Personally I hope there is a challenge that flows to SCOTUS.

As these votes show, however, the case against telecom immunity has failed to win a majority of the Senate or the House. We can expect a fairly easy passage of the final FISA bill, allowing the NSA to get back to business and the trial lawyers to look for another target. I’ll update this as the news proceeds.

Very bad indeed.

Linky.

First, on the record, we don’t support phone phreaking. Its a form of theft. That having been said what is related in the Wired article just does not add up.

Why is an indictment issued in Dallas for an arrest that was issued in Amherst, NH? I am no lawyer but my understanding is indictments generally issue in the jurisdiction where the infraction occurred. Anybody know the answer?

“…that Weigman was not supposed to know where he lived, and that Weigman had arrived in the middle of a Sunday.” This is probably the oddest piece of all. I was able to find Smith’s address in less than 5 minutes using the internet and a couple of search engines. Smith’s presumption of privacy on his part is fallacious. As to Weingard’s visit, yes it was ill advised. However I hold no special significance to it occurring on a Sunday.

If I take the balance of the article on its face, Weingard is in deep trouble. The phrekng piece is the least of it. He faces trespass, stalking at a minimum. Its an interesting case to watch. Not that it affects the majority of what we report here.

The real story? A youth with misdirected ambitions. A security offiicial with a trigger finger. The FBI doing what they are required to do. Its a shame to see a talented mind go to waste.

Arun Sarin is stepping down as head cheese at Voda, effective July. Vittorio Colao will be the successor to Arun. It will be interesting to see if this change of leadership makes any changes to the Verizon Wireless - Voda relationship. –

Vodafone Group Plc will say goodbye to its fearless leader. After five years as CEO, Arun Sarin is retiring at the end of July. Vittorio Colao will take his place; Colao has been with Vodafone for almost two years, coming on as head of the carrier’s European business.

During Sarin’s stint with Vodafone he oversaw the acquisition of Hutchison Essar in India, the largest foreign investment made in the country, and expanded Vodafone into emerging markets including Romania, Czech Republic and Turkey.

More at RCR.

When established, the USF’s purpose was to provide costly infrastructure to deliver fixed line voice service to rural America. The infrastructure has been paid for, the cost of providing service continues to decline, and the cost of the USF contunies to grow.

I rarely agree with Cnet’s Charles Cooper since he tends to like big government most of the time. You know there’s a problem when even he believes a government program is a out of control:

The FCC has a problem–new entrants are taking customers away from incumbents. Since the new entrant gets a subsidy when it steals a customer but the incumbent never loses a subsidy, competition paradoxically increases the total subsidy.

The obvious solution to this “problem” is to end this mindless pork barrel. At the very least, the FCC should cap the total subsidy and divide the subsidy according to the proportion of rural customers each firm serves. Congressman Joe Barton just introduced a bill to do at least this. Instead of following that logic, the FCC is proposing to cap payments to the successful new entrants, but to maintain fully the payments to the incumbents who are losing customers. The Barton bill actually adds another potentially beneficial step–using “reverse auctions” to drive down the subsidy dollars in each area.

Far better than even the Barton bill would be for Congress and the FCC to declare the high-cost universal service program a success and close it down. The entire program could be capped this year and then phased out over the next five years. A gradual elimination of the program would allow firms to cope with the transition, but it would mean a real transition. (Cnet)