The satellite radio market got a boost this week, as Toyota (the fourth largest automaker in the U.S. behind GM, Ford and Chrysler) announced this past Tuesday that it has selected XM Satellite Radio for factory-installations starting from 2006.  XM (Nasdaq:XMSR) already had an existing relationship with Toyota, in which the Japanese car manufacturer was offering XM as a dealer-installed option.  Another part of the deal is that Toyota also selected XM as its supplier for data services, such as XM’s NavTraffic real-time traffic information service.  The number of models offering XM as a dealer-installed option will increase in 2005, with new models such as the Toyota Avalon and the Lexus GS 330 being added to the already existing 10-model lineup. XM also has partnerships with Honda and GM.

On the same day, SIRIUS (Nasdaq: SIRI) also announced that Toyota has selected SIRIUS as a post-production (dealer installed) option beginning in February 2005 for the 9 models on which Toyota is already offering XM as a dealer-installed option.  It is widely believed that this deal came as a result of Sirus' relationship with Penske, the largest owner of Toyota dealerships in the U.S.  While the Toyota deal was a positive for Sirius, factory-installations still are the holy grail, and typically drive a substantially higher volume of activations, making things more difficult for the company to replace XM.  Moreover, XM is better entrenched due to the NavTraffic (the real-time traffic information service) portion of its deal with Toyota.  The company already offers NavTraffic on the 2005 Acura RL model, with service currently available in 20 U.S. metropolitan areas.

After AOL introduced AOL Journals and Google acquired Blogger to offer it as a blog publishing service, you knew Microsoft (Nasdaq:MSFT) would not stand pat. Last week, Microsoft's MSN Internet division introduced a preliminary version of MSN Spaces, a new blogging service "for the masses", as quoted by Blake Irving, an MSN corporate VP.

Any subscriber to Microsoft services such as Hotmail or MSN Messenger can setup a free blog on MSNSpaces.  The blog publishing service is supported by subscriptions and advertising revenues.  MSDN Channel 9 has a 14 minute video demo of the MSNSpaces' features, some of which include user restricted access, photo albums, favorite song lists, etc. Readers can subscribe to their favorite blogs via the RSS (Really Simple Syndication) web publishing system. 

Leslie Walker (techie reporter from the Washignton Post) testdrove the system and reported that MSNSpaces still is pretty much a work in progress.  Of course, in the future, Microsoft will devote its impressive resources towards this endeavor as well, thereby improving this offering.  Time will tell what the user adoption curve will be like, but thus far, I find that the existing Blogware system that I am using for Technology Futurist (courtesy of the folks from Tucows, who so generously donated the space on their server) offers blogmeisters a much richer environment and customization features.

Last week, the U.S. Supreme Court agreed to review an Appeals Court ruling that can potentially force cable companies to give third-party ISPs access to their networks.  In October of 2003, the U.S. Court of Appeals for the 9th Circuit in San Francisco held that MSOs should allow competing Internet Service Providers on their broadband networks.  This ruling went against the FCC opinion made public in March 2002 - namely, that cable operators should not be regulated as telecom carriers, since High Speed Internet (HSI) over cable was just an "information service" that is different than a telecom service.

As a result of the FCC's classification, the MSOs would not be forced to share their networks with other ISPs (an obligation that they would need to comply with should HSI be ruled a "telecommunications service").  That was the de-facto standard until Brand X, a Santa Monica ISP challenged the FCC view in court, which eventually lead to the appeals court decision last October. 

The FCC and NCTA were granted a stay of the court decision pending a request of the Supreme Court to hear the case.  MSOs have in fact resisted the telecom service notion of "open access" for a long time, claiming that it would create a lot of constraints to the industry due to new regulation, and create technical issues. 

One interesting point about this case is that the courts often seek the advice of expert agencies when pondering upon complex policy nuances such as the current telecom versus information service debate.  But the Appeals Court in San Francisco chose its own interpretation rather than deferring the decision to the FCC. 

It will be interesting to see how the Supreme Court will rule - just because it agreed to review the case, that does not imply that it cannot remand the case to the FCC for further clarification.  The FCC has been deliberating on the regulatory issue of how to classify VoIP for years, and thus far, it chose a rather friendly stance, in order to help the industry flourish.  The oral arguments are set to begin on March 23rd, 2005, with a ruling anticipated before the Supreme Court recess in June.

Of course no sooner than the issue of Philadelphia's mega-WLAN deployment was discussed here, Verizon changed its initial position in support of the controversial House Bill 30, and allowed the project to go through (at least for Philly).  The bottom line was that HB 30 was still signed, and the implication of that is that ILECs such as Verizon would have the right to keep local governments from setting up paid services like Philadelphia after January 1st, 2006.

Philly sought assurances from Verizon that the carrier would not fight its WiFi project in the event that its in-service date would not meet the requirements of HB 30.  There are indications that the city believes it will complete the $7-10 million deployment only by June of 2006.  So what's the bottom line?  Other cities in Pennsylvania will only be able to deploy a similar service until the first day of 2006.  After that, the ILEC will get the first rights of refusal (in other words, the local government will have to offer the ILEC the right to provide the service).  This bill will not affect free services.

It is laudable that Verizon allowed the Philly deployment to go through.  But the issue still is that the RBOC will have a first hand say (after the start of 2006) about which service gets deployed in each municipality from its ILEC region.  The fundamental question then becomes: will this law set a precedent that will influence similar projects in cities across the U.S.?

Amidst the flurry of announcements about the acceleration of Project Lightspeed, the availability of residential VoIP services and the IPTV deal with Microsoft, SBC also publicized its plans about a new offering geared towards VoIP service providers.  Namely, in a filing made on November 24th, SBC made the FCC aware of its TIPToP (True IP to PSTN) service, which enables VoIP providers to connect IP traffic to circuit-switched network through a specially designed interface

This last announcement did not go unnoticed by folks like Jeff Pulver, Om Malik, or groups such as the Internet Innovation Alliance.  So what's the issue?  Well, FCC Chairman Michael Powell, who is known for his VoIP friendly stance, stated:

"Should we conclude that this tariff is being used to justify the imposition of traditional tariffed access charges on VoIP providers or to discriminate against SBC's competitors, the commission will take appropriate action."

Powell already has three decisions to make related to charges applicable to VoIP services.  One of the matters to be resolved is related to intercarrier compensation.  He remains committed to ensuring the commission avoids any action that might slow down the "IP services revolution". 

Even though SBC still has not made the tariff public, there is some concern that offerings such as TIPToP might block some competitors from using the tandem interconnection altogether - making it not a viable option.  These tandem connections allow the LECs (Local Exchange Carriers) to connect with each other.  Some players such as Vonage go through CLECs to tap into the RBOC networks.

SBC is claiming that TIPToP is a voluntary product that should not impact the FCC's ruling on intercarrier payments, and that it has already gotten some interest in the offering.  BellSouth (NYSE:BLS) has already been promoting a similar service since May of 2003 (although BellSouth's service converts the VoIP call into signaling traditional phone networks understand, a more complicated and costly process than what is provided by SBC), whereas Verizon (NYSE:VZ) offers a nationwide VoIP service, but it requires customers to maintain their local main lines with the company, marketing the service as a second-line replacement.

Soon, we will find out where Powell will draw the line.  The key issue is that even as a "voluntary" service, TIPToP can potentially become a back-door way to impose the access charges that were initially rejected by the FCC.