OpManager: A single console to manage your complete IT infrastructure. Click here for a 30-day free trial.
Welcome Guest | Sign In
TechNewsWorld.com

Clash of the Carrier Titans

Clash of the Carrier Titans

AT&T's push to purchase T-Mobile would be one of the biggest corporate buyouts in recent memory -- if it succeeds. Regulators are already giving the deal harsh glares, and Sprint, the carrier with perhaps the most to lose in an AT&T-Mobile world, says the deal would impede innovation in wireless. Meanwhile, Oracle pinches HP, The New York Times builds its pay wall, and hackers filch RSA's secrets.

By Paul Hartsock
03/26/11 5:00 AM PT

Remember that rumor from a couple weeks ago that Sprint and T-Mobile were getting together? That's not happening. T-Mobile USA actually wants to get in with AT&T, which has agreed to buy the company from Deutsche Telekom for US$39 billion. Maybe those talks with Sprint really were going on simultaneously, but it looks like they didn't end so well for Sprint.

On a technical level, this deal makes a whole lot more sense. Unlike Sprint, AT&T and T-Mobile already run on the same GSM technology. There are a few differences in the ways their networks are built, but it should be relatively easy to blend them together, and it may even mean better coverage for AT&T customers and a faster run-up to 4G, closing the gap on Verizon's head-start.

From a legal standpoint, however, if AT&T wants this deal to go through, it's going to have to lobby its butt off. The process of gaining regulatory approval might be as long and drawn-out as Comcast's bid to buy NBC Universal. Might be even harder -- Comcast only bought the better half of NBC, not the whole company, and the amount of money exchanged was a fraction of what we're talking about with AT&T.

A combined AT&T&T would become the single largest carrier in the United States, topping off Verizon by a few million customers, though it would still leave some competition in the market. Those rivals seem to have different opinions on whether this deal should go through, though. Sprint is 100 percent against it; its CEO, Dan Hesse, says that if AT&T swallows T-Mobile, then it and Verizon would have 79 percent of the wireless market, which would stifle innovation. Not to mention the fact that if Verizon should square off with a combined AT&T-Mobile, Sprint would get very lonely in its position so far back in third place. The purchase would take away its only companion down there in the bottom of the heap.

Other critics of the deal agree with Hesse's point about slowing down innovation. Phone makers want to appeal to different types of customers, but in order to do that, they have to appeal to different types of carriers first. With four main carriers in the market -- some very big and others pretty small -- phone makers have options. A smaller carrier might hold the phone maker to fewer technical restrictions, while a larger one could promise more sales; phone makers can come up with different products to suit both. Also, the smaller carriers are often the ones to first experiment with new service packages that are eventually imitated by the bigger guys.

Still, if the U.S. market is whittled down to three, Sprint could quickly be squished, leaving both consumers and phone makers to choose between two huge, monolithic middlemen. Not much variety there.

For its part, though, Verizon seems to have already come to peace with the deal -- it's done nothing to protest the purchase, and CEO Dan Mead says it doesn't plan to. Maybe it figures that while AT&T is spending time and money convincing Washington to let the deal to through -- and after that figuring out how to graft T-Mobile's network onto its own -- Verizon can just keep concentrating on putting up 4G towers. If Sprint hoped the purchase would put Verizon Wireless in a buying mood as well, it can forget about that. Mead's exact words on that matter were "We don't need them."


Listen to the podcast (10:38 minutes).

Collateral Damage

It all has to do with Intel's Itanium chips, a breed of processors found mainly in business-class servers and high-performance systems. Oracle says it's through with Itanium. Itanium is deceased to Oracle; it basically called the architecture an evolutionary dead-end and promised that its future software will not be compatible with it. From now on, Oracle's application development will focus on a totally different breed of chips: x86.

That's kind of a black eye for Intel. Itanium is Intel's baby, and for Oracle to say it's nearing the end of its life is a stinger. But Intel does make a whole lot of x86 chips as well, so there's still plenty of business to be done. Intel says it's standing by the Itanium platform, despite Oracle's decision.

Dumping Itanium is also going to be painful for HP, the company that's been inhaling the secondhand smoke of Oracle's SAP rage ever since it tapped Apotheker, a former SAPper, as CEO. A significant bit of HP's enterprise business is in selling Itanium-based servers to businesses that use Oracle products. It can expect those orders to take a dive soon, and even companies that don't use Oracle may being rethinking their investments in Itanium servers following Oracle's little end-of-the-line remark.

By all appearances, this really was a jab at Apotheker personally, complete with a little name-drop in Oracle's press release on the decision. Microsoft and Red Hat get a mention for brushing off Itanium, but Apotheker was the only named individual. And HP is clearly still on board with Itanium, so why did Oracle lump it in with companies that have abandoned it? Because Apotheker didn't give Itanium a proper shout-out during his strategic directions speech this month. A fine example of the passive-aggressive reverse two-finger shame-feign maneuver in action -- well played, Oracle.

Wall, Reinstalled

Despite being one of the most famous newspapers in the world, The New York Times is bleeding money. It's the same story as a lot of other traditional newspapers that have taken it in the pants as the Web grows in power, just written in a bigger font.

The Times is a huge business. It covers news all over the world, and it needs to be able to come up with competitive pay for top reporters. Some of those reporters are the investigative types, the ones who spend most of their time digging up stories nobody else is covering. It's expensive to feed those guys, yet they're the ones who break the kind of real news people expect from a big important newspaper.

It all totals up to a huge sheet, yet for the last five years, the Times has been giving its product away for free online. It tried putting up a paywall early last decade, but that was a disaster. Since then, it's limped along on ad sales, as well as the revenue provided by its dwindling supply of print subscribers.

Now, though, the Times thinks the world is finally ready for that paywall to go back up. Starting on Monday, readers will have to buy subscriptions in order to access the site. This follows in the wake of another big New-Yorky-flavored newspaper, The Wall Street Journal. the Journal's been charging for years, and it's given no sign that it's ready to teeter on that.

It's not a sure bet that the Times will be able to follow in those footsteps, though. The nature of the content is different. Wall Street types need to know what Blue Horseshoe's in love with right now, this instant, or else some kid with a box of cigars is going to take down their empire. The Times covers important stories too, and it does interesting exclusive features, provides healthy brain food, so forth, but the urgency isn't quite the same. the Journal's buoyed by traders who'd lose a lot if they were left out of the loop for even a moment; it's uncertain whether the Times can fall back on a readership with the same level of chemical dependency.

If it does work, though, subscriptions won't be the only way the Times can draw revenue from this. Its ad sales could take on more of a quality than quantity approach. Readers who pay are loyal readers, if only because they're probably going to read more often if they're already locked into paying, and advertisers like loyal readers. The Times will also be able to squeeze better data out of readers and use that to fuel more ad sales.

As usual, though, the technicalities are complicated. There are rules, loopholes even. Like the Journal, you'll be able to access stories from the Times through Google News even if you're not a subscriber. And non-subscribers will get 20 freebies per month, regardless of where they come from.

Those who pay will need to put down $15 per month for a phone app and 20 for an iPad app. Those plans include full access to the regular site as well. So you're paying about 50 cents to a dollar per day, which is about in line with a newsstand paper, but it's way more than what you'd pay for online access to the Journal.

Also, greeting users with a username/password screen on the main site may make The New York Times just a little less friendly to the concept of social media, link-sharing, so forth. If a site requires a subscription, are people going to be less likely to link to a Times article on Twitter or Facebook? Perhaps that's what the 20 freebies are for, but I'm a little less likely to tell my friends to check out a news article if I think I might be slamming them straight into a paywall.

Keys to the Kingdom

Hackers made off with one company's crown jewels last week, but their real target is still anyone's guess. The break-in was suffered by RSA -- if the name sounds familiar, it's because it's not just a cybersecurity firm but also the main sponsor and namesake of an annual security summit that tends to attract some fairly big names each year.

RSA alerted the public once it realized that hackers had snuck into its systems using what it called "extremely sophisticated" methodologies. It used the phrase "advanced persistent threat," a term to describe long-term patterns of concentrated attack that make the whole operation sound way more James Bond than your typical gang of link-baiting malware mongers.

Whoever it was, RSA has warned that they may have made off with information about SecurID, an RSA product designed to give users two-factor authentication. It's normally a very strong way of locking up access to systems -- kind of a pain to use compared to the old username/password combo, but a solid choice among super-secret corporate inner circles, government agencies, general paranoiacs, you name it. If you really needed to seal the hatch, SecurID was a top option.

Whether that's still true remains unclear. It's not like the hackers snapped up some kind of digital skeleton key that would allow them to break into anything anywhere. But they did apparently manage to grab a good handful of secret information related to the system. It's possible they could use that to develop some kind technique to get passed certain SecurID systems. They do sound clever enough -- even RSA called their work an "advanced persistent threat," which kind of sounds like it would make a decent resume bulletpoint for a career hacker.


CyberSource Peak Season Fraud Management Guide
Facebook Twitter LinkedIn Google+ RSS