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And free hotspots for all

Because many cities and towns around the world have begun providing publicly-accessible wireless APs, how is a reasonable computer user supposed to know that an unprotected network is not there specifically to allow him to access the Internet? All stores in the Panera Bread chain offer Wifi Internet access that’s as free as the air. A visitor to downtown Albany will find himself in a brightly- “lit” environment which has so many free wireless access points that it’s hard to find an area in which you can not connect.

So imagine the surprise in early July, 2005 when police in St Petersburg, FL, picked up a man for accessing an AP on a residential street, connecting to the Internet and checking his email. Benjamin Smith III was arrested and charged with unauthorized access to a computer network.

He might well get off. After all, if all he did was access the Internet to check his email, who’s to say it’s unreasonable for Smith to assume this was kosher? The AP was wide open. If Smith didn’t attack any of the other machines on the local network, he may have been perfectly reasonable to assume that the network was meant for him to use.

While not endorsing the practice of the unauthorized use of someone else’s wireless signal, in this day and age, it can be hard to tell when you’re not supposed to log on and surf the web.

We believe that anyone who sets up a Wireless Access Point and does not follow the installation wizard’s advice to change the ESSID and password and set up encryption should be presumed to be providing publicly accessible wireless at no cost.

There is, however, a vast difference between hopping on an open access point and intruding into someone else’s network for nefarious purposes.

Also in this series…
A proposal for Reasonable Wireless Security for law firms

A sample network access policy

Wifi encryption standards

“There’s nothing on my desk worth stealing”

…and free hotspots for all

Venture Fever Hits Scandinavia

As recently as three years ago, “venture capitalism” in Scandinavia meant lending 50 bucks to your friend Soren – the one who’s fond of the racetrack. And even though Scandinavia is known throughout Europe as a hotbed of really smart people making exceptionally sexy technology, until recently entrepreneurs were, in essence, good technicians who didn’t understand commercialization.

Let’s fast forward. In the past year, more than 60 VC firms and incubators have been formed in Stockholm alone, a combination of professional VCs, as well as groups of angel investors, who have bundled themselves into unions. Many are local players, but some are international capitalists coming from the US, Finland, Norway and the Netherlands.

Last summer, did a feature on Swedish VC firm e-Chron, which had established a contest and networking event for Swedish startups called the E-Challenge. At the time, the founders said they were starting the event because of “the slow and difficult process of getting venture funding in Sweden.” E-Chron wanted to make it easier for startups to grow by bringing together entrepreneurs and the support industries that surround them, such as VCs, professional service providers and larger ICT corporations.

Since then, the VC industry has ballooned in Sweden and elsewhere in Scandinavia, in large part due to the fact that wireless is the flavor of the month. In fact, the whole VC vibe is more sophisticated and connected, with large sums of money available and a clear keenness to do deals.

VC firms are forming alliances in order to share resources and expertise, in an aim to fund more deals and better serve existing portfolio companies. One such alliance is the Global Venture Alliance, bringing together 2m Invest, Telenor Ventures and Ledstiernan. Schmooze sessions are also on the increase with events like the invitation-only Sockerbiten (“sugar-bite”), which offers a clubby atmosphere of VCs exchanging ideas and business cards and just, well, talking to one another.

Why all the hubbub? “Greed,” said Niclas Carlsson, CEO and Founder of e-Chron. “People look at this old, socialistic country and then Altitun sells for $860 million – people go crazy.”

Okay, he admitted, it’s more than greed; it’s an attitude shift as well. Scandinavian VCs agree the most important change in the last two years is that entrepreneurs are more mature. They’re packaging themselves better, making it easier for VCs to invest. However, entrepreneurs also have a lot more capital to choose from.

“It’s definitely easier to start up here than ever before, and absolutely easier to start up here than even in other areas of Europe,” said Panu Mustonen, CEO of Springtoys, which makes games and entertainment software for mobile phones and PDAs. Springtoys recently closed its first round of funding, which included a 15 percent stake taken by Eqvitec and a 20 percent stake taken by Sonera.

Some investors say the draw of Scandinavia is that there are so many competent small enterprises in the region feeding off the well-established market of the larger players, especially in the wireless sector. “The proximity of Ericsson and Nokia, and mobile in general, has done a lot,” said Jukka Hayrynen, a partner at Helsinki-based Eqvitec. “When we built our technology fund in 1997, people said, ‘technology – that’s so narrow.’ Now they say, ‘technology, that’s so darn broad.”

Such a flourishing of technology startups can only benefit regional VCs, who are seeing an increasing demand for specialized expertise. Local VCs have the ability to concentrate on specific niches, learning the ropes of a particular business space.

In Finland, the amount of money available has made it difficult for some VC firms to find enough partners to manage their range of portfolio firms effectively, said Mustonen. That means VCs who really know a specific sector are in demand. “If I were a venture capitalist myself,” he said, “I would concentrate only on exactly what I know best; if you understand the sector, can limit yourself to just five companies and concentrate on building their businesses, you’ll make a killing in this city.”

Joining together with other VC firms is one way to concentrate efforts and expertise. “There’s a real attempt to get together and gear our resources,” said Kim Bach, vice president at 2m. Joint activities such as co-investing, sharing knowledge, extending buying power and working with shared databases could help VC firms “reach critical mass in sectors faster than we ever were able to before,” Bach said.

Bertelsmann Wants It All. They May Already Have It.

The announcement of a deal between Terra Networks, Lycos and Bertelsmann to create effectively the world’s broadest-based Internet portal is the latest in a series of Bertelsmann plays to aggressively expand their Internet activities. This fits nicely into Bertelsmann’s core strategy to leverage their enormous content pool into the one of the world’s largest offering of digital products.

“Kudos on their aggressiveness and their long-term vision,” said Michael Blok, senior analyst with Rabo Securities, “They enjoy a nice natural ‘hedge’, whereby if things on the web move as fast as the company expects, it will be in a good position to deliver through its Internet plays. And if things move slower, then their old core businesses will make more money for a longer time.””

Bertelsmann is not a publicly-traded company, but does allow individual investors to participate in profit sharing, through the use of profit participation certificates, sold on the Frankfurt Exchange and called Genussschein; about 30% of BertelsmannE’s equity capital is derived through these certificates (trading currently at Euro97.4).

Less splashy in the press than the Terra/Lycos/Bertelsmann deal but crucial to Bertelsmann’s overall internet strategy was a decision yesterday by the European Commission that cleared the way for a Bertelsmann purchase of 50% of Sweden’s Bokus.

Bokus, which successfully established itself as an online media and entertainment shop in Sweden, Norway, Denmark and Finland, in all local languages, is not surprisingly the market leader in all those countries – countries which, by the way, have the highest percentage of internet users by population in Europe. The joint venture acts as a major strategic foothold for BOL in Scandinavia, and dovetails nicely into Bertelsmann’s overall goals.

To get an idea of the strength of Bertelsmann’s holdings, consider that the privately-held German company is the world’s largest publisher of English-language books, through its acquisition of Random House; it is Europe’s largest broadcaster, with a 50% stake in Luxembourg based CLT-UFA, offering 40 TV and radio stations, and with their merger with Pearson TV, part of Pearson PLC, they will also be Europe’s largest production company. Bertelsmann owns BMG, the world’s fourth largest music label; magazine publishing giant Grüner and Jahr, and scientific publisher Springer.

And in order to sell all that content digitally, Bertelsmann has built, through development and acquisitions, a multimedia empire that includes BOL, a stake in US-bookseller, a 50% stake in Lycos Europe, and created the Bertelsmann Broadband Group, which develops interactive services such as television and film for cable networks utilizing broadband technology.

“Our core strategic focus is on further development of our positions in our different content markets,” said Bertelsmann spokesman Markus Payer, “so on the technological side, we’re working to digitize all our content.”

“That may be their long term goal, but that’s not the whole story,” said Blok, “It’s also based on organic growth and new initiatives, and perhaps cause they’re privately owned, they’ve been reasonably willing to suffer losses whereas publicly quoted publishers are less willing to lest their stock nosedive. “

But Blok points to rapidly changing factors in Bertelsmann’s core businesses, such as music publishing, which will find it increasingly difficult to make the level of profits to which they’ve become accustomed as the Internet changes the music publishing business model completely.

One of Bertelsmann’s most valuable sales assets are their book clubs, with 25 million subscribers throughout the world. The clubs are already fully operational on the internet, giving Bertelsmann a wet-dream of a mailing list. But Blok warns that this too can change, as the internet would tend to make less attractive the kind of monopolistic or duopolistic models Bertelsmann enjoyed with its clubs to date.

Bertelsmann, meanwhile, is aggressively pressing to further their goals; to that end, Random House is working to digitize its entire backlist of books, and BMG is digitizing all its music offerings. Bertelsmann also has a 60% stake in Pixel Park (Neuer Markt: PXL.NME), one of Europe’s leading internet services companies, providing services to establish and maintain online presence, Internet and intranet solutions, e-commerce platforms and a consultancy business.

“As an analyst I’m looking for true leaders, with high barriers to entry,” says Blok, “Now, Bertelsmann currently don’t have a stake in something extremely huge that is certain to dominate a submarket – an or even, anymore, an AOL. If they had something like that, then whatever happens in the next five years they would come out ahead.”

But, Blok noted, Bertelsmann’s BOL is well on its way, and should provide for a nice battle when Amazon really enters the European market.

Whither The Euro Portal

In the aftermath of the disasterous, World Online and Lycos Europe IPOs, and with softening expectations for T-Online’s mid-April IPO, web insiders are taking a fresh look at the European portal business. To industry experts, the “bigger is better” American portal model just doesn’t work over here.

Instead, new home-bred ‘affinity portals’ are rapidly increasing their traffic, focusing content to narrow ranges of interest, building loyal online communities, expanding across borders and cultures and attracting investment. In this market, analysts and experts say, focused is beautiful, and general portals are out.

Consider, a German financial portal whose 1999 profits were up 600%, and which last month brought in more traffic than the German versions of T-Online, AOL and MSN combined.

Or, a Berlin-based comparitive shopping portal that has successfully expanded into several European countries. “It’s essential for commerce players to have that kind of pan-European approach, and this multi-national focus is key,” said Noah Yasskin, Europe anaylst at Jupiter Communications, “We’ve yet to see a clear leader emerge in that sector and there are still opportunities to lock this market.”

Dooyoo, and its German rival, have several advantages over the US competition beginning to move into Europe, including knowledge of local markets, and the ability to spend, while US shareholders are currently a bit squeamish about investing in Europe.

This trend is good news for the dozens of young, ambitious European start-ups that are on the scene today. And it’s good news for their investors.

It Was Always Over Over Here
The American portal model is to make a homepage on which users feel comfortable to begin each web session – an all-encompassing, broad-based link farm and search engine which tries to allow users to find whatever it is they’re looking for on the web from a single starting point. The model holds that the more users there are online in a given market, the more the portal is worth to advertisers, who pay fixed amounts per thousand views of their ad.

But therein lies the problem with the model in Europe. The American portal model is based on a culturally and linguistically homogeneous online society. Europe, as some have noted, does not share this homogeneity.

Fragmentation In A Model Built on Unity
In other words, what plays well in Peoria doesn’t necessarily play well in Passau or Paris. It’s simple math: if every Belgian came online, you’d have a grand total of 10.1 million potential customers (in any case, only about 10% are online). And sure, Germany’s a big market with 82 million people, and 20% of them are online.

But Germans speak German.

T-Online, Europe’s largest German-language portal, has that portal market (along with Austria’s and German-speaking Switzerland’s) sewn up quite nicely, with over 7 million subscribers and 115 million monthly page views, and their upcoming IPO is highly anticipated, offering 108 million shares at a range set between Eur 25 and 30.

T-Online’s competitors in Germany have less robust numbers, and market share is being sucked up quickly. Traditional portals like MSN and come in routinely with under 30 million page views a month; gets about half T-Online’s page views, as does the portal/ISP combination AOL, with 3.4 million users. T-Online would seem to be unstoppable.

Not quite. Right next door in France, T-Online holds about as much market sway as you’d predict, not even denting the already saturated French-language portal market. There, and are the belles of the ball, with over 70 million monthly page views each, and competition is heating up from rivals, and others. The large portal situation is the same in all European countries: fragmentation in a model built on unity.

As early as October 1999, a Jupiter Communications report proclaimed the European Portal market saturated: “The window of opportunity for European portals is closed,” it said, “Europe’s existing portals will consolidate into a few multinational portals capable of aggregating audiences across several markets.”

Jupiter’s Yasskin states: “Online content is available globally but only relevant locally, so content ventures must achieve scale and value through localized and branded category-leading sites, not portal plays.”

Making A Bad Situation Worse
Nonetheless, with fierce competition for eyeballs, Europe’s large portals have been forced to add heaps of free services such as free internet access, free email and other perks. National telecoms and their competitors got in on the action as well, and now attempt to create enough offline brand name recognition to pre-win online brand loyalty.

“The trend seems to point to portal services trying to attract not ‘millions of users’ “, said Bank Julius Bär analyst Joeri Sels, “but rather ‘dozens of millions of subscribers’, which will be necessary for profitable operations.”

The market for those monstrous “Über-Euro-Portals” may be flooded, but thereE’s still plenty of room to move with such smaller ‘affinity’ sites.

The Field
Today’s “portal” has expanded to include places where users decide to start particular activities or searches on the web – so an investor would begin her search for new high-tech European investment opportunities at; a travel writer at one of a multitude of ticket sites including, or; a researcher in Cambridge at; a shopper in Milan or Berlin at or All these are sites containing links to everything about a particular subject.

Look at, whose 330,000 customers have Eur 6.75 billion on deposit, and made over 5.1 million transactions last year. Comdirect appeals to the mass-market online investor by offering links to market news from around Europe, and attracting loyal users through an innovative game called “broker poker”. With broker poker, customers create pretend virtual portfolios and compete against one another in a giant pool, the winner taking a prize of Eur100,000.

Can this work in France and the UK as well?

“Absolutely,” said Suzan Nolan, President and lead marketing analyst for Paris-based Blue Sky International Marketing, “this is a great tool for teaching investors how to invest online, and it’s also a very nice way to let experienced investors run multiple portfolios, test what they’re thinking and expand their knowledge.”

That seems likely. With 388,000 users (63,000 new customers within March 2000 alone), and 335,000 direct brokerage customers, and after-tax profits up 600% last year to Euro 13.7 million, Comdirect plans its IPO on the Neuer Markt for later this quarter.

That’s what works: “build locally, cross the nearest border and do it again” might be a rallying cry for the new breed of specialized Euro-portals. And do it fast. While big guns attempt to develop an all-round pan-European strategy, smaller and more daring internet start-ups are taking ideas and charging with them, learning from their mistakes.

Or put another way, “Load…fire…aim,” the core strategy of feisty comparison shopping portal, which now has hard-hitting and successful practical-information shopping sites in Germany, Spain, Italy and France, and plans to launch in the near future in the UK and Scandinavia.

The site’s draw is consumer commentary on products from toasters to blenders to computers; ratings of products by consumers help others make purchasing decisions about specific products like laptops, or children’s books.

Dooyoo’s 43,000 members (and current 49,000 product listings) think this is so ducky that the site got six million page views in February. Perhaps more important, last month dooyoo secured its second round of funding (in the “double digit millions of dollars”) and solidified plans to go public on the Neuer Markt later this year.

“Compared to the fuss over general portals these kinds of companies might not appear very distinguished,” said Christian Junk, Senior Software Analyst at Commerzbank, “but it would seem they have a very good opportunity to contribute highly specialized content offerings and grow into affinity portals.”

Bank Julius Bär’s analyst Joeri Sels pointed at a Dooyoo rival,, which bills itself a ‘horizontal one-click shopping portal’, and which is also moving fast, with sites in Spain, Italy, France, UK, Austria and Germany. Ciao recently merged with another similar German start-up, “The first step is lots about building a feeling of community,” said Frederick Paul, CiaoE’s founder and director. Ciao started with US$5MM from Wellington Partners and media house Burda, and they’re about to close their second round of about 20MM; the new company is presently valued, they say, at about $75MM, and say they’ll go to an IPO at the end of 2000 at the latest.

The Near Future
The big-is-beautiful crowd isn’t going away overnight, and the “gaggle” factor of European web investing will still follow these major players into the market. There will be more portal IPOs in the coming months, and as the numbers increase there’ll be even more consolidation. The huge players will be elbowing one another to grab the remaining sections of the general portal market.

And don’t forget the portals run by the incumbent national telecoms, which provide both huge amounts of national traffic as well as juicy, content-rich merger target grist for the ever-expanding large portal mill.

Over 12 months, as investors and especially web users become more sophisticated, the organic attractiveness of such offerings will wane. Sure, they work in the USA, with its large, culturally and linguistically homogeneous market.

Whither The Über-Euro-Portal? This trend doesn’t by any means signal the death of the giants. By incorporating local content through mergers and alliances, and working to leverage the potential of e-commerce, m-commerce and wireless-mobile services, there’s still plenty of opportunities to grow for the big guys.

As T-Online, Yahoo!, AOL, MSN as well as banks and equipment makers move in, the European portals will continue to be enthralling places to watch for both investors as well as growing numbers of European internet users.

Setting up Squid. Then Using It.

So I’m here in California, staying at a hotel for ten days and want to look at some websites. Nothing too fancy, some blog entries, research for upcoming reports, maybe some racy stuff like No-Load Mutual Funds. And I am, of course, like you, on a free, open, wireless connection. My mail is tunneled, but web isn’t. So I realize I should set up a proxy server somewhere else, like at home, and tunnel into it, lest anyone sniffing on the local WiFi LAN (not that I’d ever do something like that with something like Wireshark) or indeed the hotel’s wireless contractor have a record of everything I look at and type.

No brainer: Squid’s your man. But in looking around for a plain-English How-To set up Squid and then use it guide, I couldn’t find one. So here it is. The first thing to do then, is install and configure Squid.

Setting Up Squid
Because I am on Gentoo, this was easy:

emerge —sync
emerge squid

I bet on Debian it’s as simple as

sudo apt-get update
sudo apt-get install squid

Once Squid was installed, I saved the original /etc/squid/squid.conf file as a backup and then made this my new one:

http_port 3128
cache_mem 50 MB
visible_hostname DOSA
cache_dir ufs /var/cache/squid 500 16 256
offline_mode off
maximum_object_size 102400 KB
reload_into_ims off
pipeline_prefetch on
acl my_network src
acl localhost src
acl all src
http_access allow my_network
http_access allow localhost
http_access deny all

Then save, and restart squid (or start it)

/etc/init.d/squid start

That, you’ll see, allows traffic from both local network and localhost but not to anyone else. We’re accessing via SSH, so once we’re tunneled in, we are on localhost.

I only allow access to the box via one port for SSH, and that is not a standard port. This little security-by-obscurity kludge was not for defense against hackers, but only to stop the bots from constantly knocking on my door and filling up my auth.log with automated login attempts. Those attempts were useless anyway because of the actual (non-obscurity-related) security measure: I don’t allow remote login with a keyboard password – you need a pre-saved key. Also, of course, the firewall does not accept connections to the Squid port – to get at that port, you need to SSH in and do port forwarding. (If anyone can tell me a better, safer way to do this I’d be obliged.)

There’s some other authentication stuff one could do quite easily (forcing a user prompt in the browser when users start a new session to authenticate to Squid via pam) that I feel comfortable ignoring in this case because I’m fairly confident about the physical access to the network (if that’s breached I have bigger problems) and also because web access to the box is limited as I’ve just described.

Setting Up The Tunnel
Now the trick is to get my machine here in the hotel to talk to Squid across an encrypted SSH tunnel lest I send my blog password and evidence of my looking at IBEX 35 stocks to everyone in my 17-floor hotel. This machine is an Ubuntu box, so I set up a simple SSH tunnel with port forwarding – using the technique first rattled off to me by Ian Sacklow, head of the Capital District Linux Users Group, while we were standing in a Barnes & Noble store about three years ago:

sudo ssh -L 3128: -p 7890 -f -N

The -L means bind the local port (given first) to the remote port (given last) of the server (given in the middle, wrapped between ::s). Put in a mnemonic way,


By that standard, I’m binding port 3128 of my local machine ( to port 3128 of the remote machine. Then I specify the remote machine with the and specific port command (if that is required).

The -f sends the SSH shell to the background – but brings it back if the SSH server prompts for a password or sends something else back. The -N (in SSH2 only) says, “And while you’re in the background, don’t execute any remote commands,” or in this case, “Just set up the tunnel and make yerself scarce.”

If you’ve timed out a sudo session or if you have just opened the terminal, you’ll be first prompted for your user password to carry out the sudo part of the command. Once that’s done, if your SSH server allows you to use keyboard interactive logins and you don’t have a remote key, then you’ll be prompted for the password of the user name on the remote server. Enter it and if accepted, you should just return to a local user prompt. Same if you have an SSH key – after running the tunnel command, you’ll just be returned to a local user prompt.

Tip: If you set up the tunnel and you get a message saying that the local port is already in use, find out what’s using it: in this case, you’d run:

sudo lsof -i tcp:3128

That should get you info about what’s running. Kill it and then start the tunnel again. Unless you decide that you don’t want to kill it, in which case, you’d change the local bind to a different port. It doesn’t matter a whit to either SSH or Squid.

Firefox settings screenshotSetting up Firefox
Now things are easy. You’ve got Squid running on the remote server. You’ve got an SSH tunnel connecting you to it. Now just tell Firefox where to look. In Firefox select Edit -> Preferences -> Network -> Connection Settings. Tick the radio button marked, ‘Manual Proxy Configuration’, type E’’ in the HTTP Proxy box and ‘3128’ (or whatever) into the Port box, click OK, then Close. Now type into your URL bar and see what happens. With luck, you’ll get taken to Google.

To make sure you’re actually using the proxy, SSH into the Squid server box, and look at the tail of /var/log/squid/store.log. You should see something about google. To watch it change in near real time, do:

tail -f /var/log/squid/store.log

And surf to another location.

Web surfing in hotels or coffee shops is nasty stuff. This is one way to add a modicum of privacy to your activities at no cost but your time. Of course, corporate firewall requirements might require some modification to the tunnel commands to get out to your server, but shouldn’t present too much trouble. But beware – an entire industry exists which seeks to discover people engaged in just that kind of activity, which is certainly against your corporate access policy.

Happy Days In The Bird Business

With political intrigue, high finance and customers in exotic locales, it’s not a boring time to be in the “bird” business.

Despite a global communications sector slowdown and tepid business climate, revenues of satellite services companies grew 7 percent to $49.8 billion in 2002, according to the Satellite Industry Association.

But it’s not the best of times, either – that 7 percent growth pales in comparison to the 17 percent jump in 2001.

Operators, though, are investing heavily in new technologies and standardization despite a string of bankruptcies over the past decade that have made financing more difficult.

The major players – Inmarsat, PanAmSat, New Skies Satellites, Loral Skynet and Eutelsat – operate constellations of satellites, providing a broad range of services and technologies.

As new satellite-based network technology emerges and the industry enters a transitional phase, these companies must foster new growth while maintaining their core customer base.

The current generation of satellites are essentially “bent pipes,” in that they take a signal from a specific location on the ground and broadcast it back towards earth to an area significantly larger.

But the next generation of birds promises very high-speed Internet connections and on-board, high-speed digital signal processing; satellites will effectively become Internet routers-in-the-sky.

While pay television has been a runaway consumer success story for the satellite industry, efforts to sell satellite phones before their time soured the concept of satellite phone and Internet services in the minds of consumers (and the investment community).

Yet behind this image is a steady and sizable business.

The core customers are the military, governments and corporations seeking secure, remote access to data; broadcast television, and telephony. Satellite services are particularly good at providing communications between central offices and remote locations in industries like natural-resource exploration, finance, manufacturing and transportation.

By far the largest commercial customers are military; Gartner DataQuest estimates that the U.S. Department of Defense alone spends $300 million annually on satellite services. Satellite communications, says Patti Reali, an analyst at Gartner, are a significant part of U.S. military tactics. In turn, the military is driving the requirements for the next generation of satellites, she said.

Satellite companies are hoping their new capabilities will appeal not just to governments but to businesses small and large seeking the ability to send and receive data from anywhere.

Inmarsat, the world’s first global satellite communications operator, is the best-known name in the small circle of satellite consortia that operate in this business. Established by the United Nations in 1979, the International Maritime Satellite Organization was privatized in 1999 and has 86 government and corporate shareholders. After retreating from plans for an initial stock sale because of unfavorable market conditions, Inmarsat is now seeking a private sale.

It is the object of a bidding war between a pair of British private equity firms, Apax Partners and Permira, and a U.S.-based consortium comprising Soros Private Equity and Apollo Management.

The bidders are attracted by Inmarsat’s maritime customer base and military contracts. Inmarsat now also serves mobile business Internet users with its Regional Broadband Global Area Network product, known as R-BGAN, a portable satellite modem providing relatively high-speed Internet access from a portable unit that resembles a notebook-computer.

“BGAN is not for everybody,” said Paul Griffith, vice president for portfolio development at Inmarsat. “It’s not consumer-oriented, but it will be very attractive to businesses” beyond the traditional oil and gas, humanitarian aid groups and media markets.

If satellite companies hope to appeal to more mainstream groups, they will have to make their offerings simpler, cheaper and more universal.

A newly-adopted standard, digital video broadband return channel over satellite, or DVB-RCS, may foster competition and help reduce satellite broadband Internet charges, allowing satellite companies to compete with terrestrial options such as digital subscriber line, or DSL; cable; and fiber optics.

Satellite companies are also appealing to developing countries, who find that the cost of building a traditional, earthbound communications network is sometimes more expensive than a wireless solution.

Even the developed world has areas in which satellite technologies can complement fiber and cable networks. Satellite can more cheaply bring broadband to remote regions in countries like Spain, France and even Germany and the Netherlands to help those countries comply with an EU initiative called eEurope 2005, which mandates that all public schools, administrations and hospitals have broadband capabilities by 2005.

Similar government initiatives in Canada and Mexico have caught the eye of satellite services companies.

“We also continue to see strong demand in the Middle East and Asia,” said Diederik Kelder, senior director of business planning for New Skies, “and there is a lot of activity in Western Africa as well.” New Skies, which provides infrastructure to Internet service providers operating in remote areas, has seen heavy interest in data services in and around Iraq as that country’s reconstruction ramps up.

Late this year, the Spaceway unit of Hughes Network Systems will employ high-performance Ka-band satellites, which combine sophisticated onboard digital processing with advanced transmission capabilities. Hughes hopes to upgrade customers like banks, credit card companies and other businesses, which need terminals to communicate with a central location, to this next-generation of satellite. They will simultaneously try to expand into the small-and medium-size business market with services such as fast Internet access.

As for satellite companies offering broadband services to consumers, analysts are skeptical that a case can be made. The few initiatives which have popped up – notably including Star Band and DirecPC in the United States – have been commercial failures. Lars Godell, a senior analyst at Forrester Research, places satellite services firmly in the “other” category when discussing the European broadband market.

“Consumer selection of broadband comes down to price, price and price,” he said, “most satellite solutions require either a large subsidy from the service provider or, less likely, from the consumer – just remember how cheap DSL and cable modems are these days.”

WiFi encryption standards

There are three commonly-used standards of Wi-Fi AP security in the world today. The best known, Wired Equivalent Privacy (WEP), is readily vulnerable to exploits and must not be trusted except for the flimsiest of protection. WEP is widely considered to be a trivial barrier to even barely competent hackers, and to afford only a bare minimum of protection on its own.

Wi-Fi Protected Access (WPA) was developed as an intermediate solution to the revelation that WEP’s encryption had been highly compromised. The second generation of WPA security is called WPA2, and this is the current state of the art. WPA2 delivers (to date) very good encryption and protection against eavesdropping. WPA2 Personal provides strong encryption and uses Temporal Key Integrity Protocol (TKIP), which dynamically encrypts the key used for authentication. WPA2 Enterprise uses an authentication server to authenticate users.

Until recently, implementing WPA and WPA2 was something of a hassle; if you’ve been wireless for some time now, and still have Wireless B Cards (see sidebar), you’ll have challenges using WPA. If you have fairly new equipment, such as an Intel Centrino notebook, you’ll be able to use at least WPA if not WPA2.


Also in this series…
A proposal for Reasonable Wireless Security for law firms

A sample network access policy

Wifi encryption standards

“There’s nothing on my desk worth stealing”

…and free hotspots for all


ASPs Heat To Red Hot

In the midst of early April’s [2000] major tech sell-off, a company called Software AG had an oversubscribed and successful IPO on the Neuer Markt, and analysts say that a major reason for the successful launch was that the Update is an early mover as an Application Service Provider, or ASP.

To many analysts, ASPs are simply revolutionary. “As a general trend,” says Charles Homs, Senior Analyst at Forrester Research, “ASPs will substantially change the overall facility delivery in the e-business market.”

The European ASP sector has gotten off to a slower start than in the USA, but it is definitely heating up, and a sector worth watching. And Europe-based ASP companies have a decided home-court advantage over American imports: industry movers like the Finnish Sonera, German Infomatec and England’s Netstore, and even giants such as SAP, understand that American solutions don’t work well out-of-the-box here.

ASPs offer businesses of all sizes offsite tools to store, retrieve and use information. When broadband hits Europe – in six to nine months for Scandinavia, and a year to a year and a half in most other countries – the spread of ASP is expected to catch on like wildfire.

Netstore, with 750,000 customers and a market cap of €895 million, and the Infomatec (IFO NM) offer customers centrally stored applications, such as spreadsheets and inventory control ystems, as well as providing storage for data – effectively allowing companies to outsource all their IT needs.

Sonera (SOY GR) focuses mainly on web-based transaction and delivery products, such as allowing sites to offer streaming media and other functions.

The road to European ASP market is fraught with problems that locals have a better time identifying. For example, said Homs, a company providing Customer Relationship Management software to a company in Germany is required by German law to physically maintain the server within the German borders, to comply with German data security laws.

But IBM, too, has been an early mover in the European ASP space, and have broad experience in implementation in Europe. For the past two years they’ve been actively developing ASP products.

What’s An ASP?
ASPs are large, ultra-reliable, high-capacity and high-speed servers that store not just a company’s databases and information, but also the applications that manipulate the data. Whereas companies now invest in traditional “fat clients” – the typical computer/operating system combination wherein applications are run and data stored – many companies in the US and Europe already employ a new system.

Using a fast wired or wireless internet connection and a “thin client” – a desktop, notebook or even palm-top device running just a simple operating system and a web browser – users can now download the shell of, say, a package tracking or inventory system, call up data they need, modify it and store the results, using only software stored on the ASP’s server.

For small to medium size enterprises, ASPs could be most valuable, allowing them to maintain one copy, not thousands, of a program, and administer it centrally.

“This is a really interesting sector, because these ASPs can really help small to mid-sized firms save lots of money,” said Peter Klostermeyer, analyst at VMR. “Today’s software applications are not as expensive as they used to be but the beauty of ASPs is that they bring down the costs of implementation and administration of systems”

A not-so-subtle differentiation in the ASP sector is between hosting and true ASP, and the most important question is the who is actually implementing the solutions. Some ASPs simply give you the platform and allow a client to load whatever you choose, while others set up all the infrastructure, running everything on the server. They often limit the flexibility to what can be customized.

But to small- and medium-sized enterprises, this second option brings a new world of computing power for far less than doing it yourself.

“These are the companies that stand to gain the most in the short term,” said Homs, ” because companies are finding it increasingly difficult to find the people to set up their systems and web systems – and it’s also very expensive. But this allows them to share the costs with other companies. I think this type of ASP is a very lucrative solution.”

There’s Money In The Middle

In 1997, when WAP was unveiled to the world, the proposed information flow chain neatly stated that content would be provided in wireless markup language (WML), converted to binary WML, sloshed through a WAP Gateway, blown out on cellular networks like GSM, and finally sucked into and displayed on mobile telephone handsets.

Customers who were even able to get the first WAP phones (many models were late in rollout) complained bitterly of slow speeds, caused not just by the service but also by the devices themselves. The over-hyping of WAP, especially in Q1 2000 and Q2 2000, and subsequent disappointing offerings nearly put the nail in WAP’s coffin, from a marketing standpoint.

More significant than the slowness, however, is the fact that with the wireless Internet there are heaps of different devices to format for, and WAP-oriented content providers have the not insignificant task of managing two content formats, one in HTML and one in WML.

Problems aside, WAP probably isn’t going anywhere, at least for the next few years, simply because of device penetration: millions of WAP handsets are already in the hands of users, and new GPRS (general packet radio system) or 3G-enabled terminals will need time to run their product lifecycle from early adopter high-fallutin’ business people, through to the kids in the discos to, well, my mother.

New solutions So as mobile data delivery moves from phone handsets to “terminals”, competing browser protocols and devices will come and go in the coming years. Getting content to all the different devices is still the challenge and there are lots of ways to do it.

Take a straight “delivery system” such as AvantGo, which is purely infrastructure: companies use it to extend their content or applications to a mobile device, by compressing image size and format and optimizing layout for the device requesting the information. It also manages offline versus online content, letting devices with always-on connections browse at will but caching entire sites locally for people with dial-up connections.

That’s a straight compression solution and many in the industry say that “trans-coding” (conversion) of one form or another will be the way to go in the future. Because legacy content isn’t just HTML (it’s often in the form of Word, Quark XPress, flatfiles and PDFs) software that trancodes or converts from old formats to new ones is hot these days, with dozens of startups saying they can do it better than anyone else. Those companies will undoubtedly get shaken out, and some clear winners will emerge in the next year or so. More interesting than them, however, is the coding method and the process used.

As we have seen, the darling of the “do-it-all-code” pack has been XML (extensible markup language). While HTML, the markup language of the Internet, allows control over the appearance of content, such as for bold (the command for a bold typeface), XML allows markup that describes the content itself, such as Le Grove.

The beauty of XML, and XLST, the stylesheets that control how XML can be presented on a page, is that they create a single source of uniformly-formatted data from existing content, which can in turn be squeezed out into whatever flavor you want – HTML, WML, nML and so on.

A new data chain So the new chain of data goes from legacy content to content conversion; to the generic, XML-ized content; to a content gateway, which takes the XML and converts it to both device and code-specific content based on the type of device requesting the data; to the protocol gateway, which negotiates multitudinous device protocols such as WAP, and iMode; to the network and finally to the wireless devices.

You could see how this type of thing would be of compelling interest to Roger Barnes, a consultant for the Rough Guides series of travel guidebooks, which sits on a heap of content in QuarkXPress.

Barnes was approached by AuthorOnce, a company that claimed that they could “actually do it now: take our content, put it through a GUI, and put it out to any platform we wanted,” says Barnes. As we went to press, Barnes had seen and been impressed with a small demo, the success of which had led him to schedule a meeting in New York with the AuthorOnce team and Rough Guides’ senior management.

AuthorOnce is one of several companies offering what may be looked upon as complete middleware solutions – from one end of the chain to the other, and then back again. The company, which has received friends and family backing to the tune of $750,000 and is currently fishing for a first round of funding, claims that what sets it apart from companies like AvantGo and Everypath, is its method of getting data from the legacy system into XML in the first place.

“We’ve got travel books, but we’ve also got guides to music,” says Barnes, “Converting text to XML is one thing, but we’ve got pictures, maps, headlines. The company’s “rule engine” system learns about the way we publish our books every time we work on one. So preparing the new Rough Guide to New York, it knows what we did last time.”

That’s a different added value from offerings from other companies, like AvantGo and Everypath, that simply take content, pull it up into XML, and send it out to a Web or WAP interface. Those companies say that their products are perhaps the most effective way of getting legacy information out to a world of different device formats.

AuthorOnce might disagree, saying that the hardest part of the chain isn’t delivery to the devices, it’s XML-ing it in the first place, and doing it in a way that allows you to control the flow of data and create rules for future conversions of like-formatted but different texts.

Taking one end of the chain
“Well, if you’re in the business of from n to XML, of course you want to view this as the problem,” said Rikard Kjellberg, CEO of Ellipsus Systems, a company in Stockholm that provides the Protocol and Content Gateways. “There are lots of excellent tools that offer the mechanics of going from the database to XML – I’d bet even Oracle would have tools for that.”

Kjellberg’s Ellipsus concentrates on what happens after the content is in XML, and how to best transmit the data to the jungle of devices out there. Its Sargasso Mobile Internet Server gives an open software platform that lets legacy content connect, through any IP bearer (CSD, GPRS, etc) to client devices. It consists of a pull and a push proxy gateway, a directory interface, a manager interface, a security pack and a “gatekeeper” firewall, allowing access control for the Web as well as RMI, CORBA, SOAP and other objects.

That is the unique selling point; Ellipsus allows developers to introduce CORBA (and, for example, Enterprise Java Beans) all the way to the device, letting them make a more dynamic interface to legacy systems than would be available with traditional HTTP.

What it’s doing is creating a virtual thin client within the Ellipsus system, which end users access via nML from their phones. The phone doesn’t need to support CORBA, it just needs to communicate with Ellipsus, from where the object communicates with the legacy content or application. The menu the user sees on the phone doesn’t change, it’s just got a different back end: where a menu would have behind it a URL, like , the object-access menu has an address like .

Ignoring the problem
And then there are those who would ignore the problem completely, saying that they’re focusing on the problems created by having multiple systems in the first place. Companies such as mi4e, a Stockholm-based company that makes a plug-in for web servers that acts as a WAP protocol gateway on existing Microsoft IIS or Apache webservers.

There are also service developers, like France-based Selfswitch or Stockholm-based Expedio, which is producing unified messaging systems that let operators offer customers one central repository from which they can stay connected to voicemail, email, faxes, and a synchronized schedule; or Port42, which makes application portfolio packages that operators can buy in bulk, branding entire suites of applications to offer their customers instant application packages.

Similarly, there is Stockholm-based ZoomOn, which designs and implements vector-based graphics (VBG), and operates on the assumption that WAP – which does not support VBG – isn’t here to stay.

These companies are in effect saying that it’s too early to dedicate a company to bringing content to users via existing platforms or procedures, but that when the platform is agreed upon, they’ll be there selling the stuff that will make people want to burn up those airtime minutes.

In fact, unified messager Xpedio is going one step further, developing a platform for that time, about three years from now, when Britney Spears or whoever is then Britney Spears decides to become a “Virtual Operator.” Britney’s going to give away a SIM card with every CD that lets her teeny-bopping buyers get 10 minutes of phone time, 300 SMS messages and a Kiss Britney game.

“The platform they’re working on lets you, say, if you’re a U2 fan get a U2 subscription whether you’re in Ireland or Sweden,” said Port42’s CEO, Johan Rosenlind. “That’s a great idea but it’s still a couple of years away.”

Not so fast; they, and all other platform vendors will confront significant resistance in the form of iPlanet (the Sun/Netscape alliance), Oracle (Portal-to-go, ASWE9i), the Icelandic entry WAPalizer and Microsoft MIS. Basically, all these tools do much the same thing. How Xpedio will stand up in a fight against the portal-mongers is left to be seen.

Nokia: Let ’em Make Cake…

The future is wireless, or at least that is what Nokia, Ericsson and a host of startups and network operators are earnestly hoping. But the quick success of 3G – The Third Generation of mobile telephony – is more than profitable icing for these companies; it has now become a matter of survival….

This article, which ran in the February, 2001 issue of Tornado Insider magazine, looks at the overall climate in European development of 3G, and then explores how each of Europe’s largest telecom networking manufacturers, Ericsson and Nokia, is coping with the challenge.


In the main lobby of Nokia House, a wood-steel-and-glass curiosity in the Finnish city of Espoo, is an impromptu cell-phone museum. In it, alongside all the sexy phones that rocketed the Finnish manufacturer to No. 1 in handsets, we viewed the suitcase-sized Mobira Talkman “portable” cell phone all the yuppies were buying in 1986.

For all its prescience in handset design and user habits, no one knows better than Nokia how difficult it is to predict future trends. Painfully aware of industry missteps earlier in the 1990s, Nokia discusses 3G with a reverence, and makes predictions about “classes” of applications and “styles” of usage.

But it won’t predict specific applications that will emerge as killers. The logic is cunning: Predict the next SMS? Thanks, no. But it will hot-house every person with an idea for an application, maintain an open API (application program interface), provide technical details to everyone, and market support to the successful few. Now there’s a situation in which Nokia doesn’t care what the next big thing is, because in theory at least, it will already have it under its wing.

“Nokia’s approach is absolutely that,” says Mika Koskinen, CEO of Entirem, which develops a secure wireless transaction platform for banks and portals in cooperation with Nokia. “The general impression is: focus very strongly on our core business, and don’t then get too heavily involved with third parties, at least at the early stages.”

For startups, this is great news. “It’s impossible for us to define the killer apps,” says Mikko Pyykka, Nokia’s 3G application marketing manager, “so we just need to cooperate with a large number of developers. But we think that at the end of the day the real killers will be somehow related to messaging.”

Messaging is what Nokia says will be the main application when it comes to revenues for 3G, and it, like Ericsson, farms its developer community for the latest and greatest. But unlike Ericsson, Nokia seems to be cut-and-dried about the application developers in the overall food chain – they’re valued, to be sure, but they’re outsiders.

During the Sydney Olympics, MobileChannel.Network set up a one-way messaging system for Nokia to provide sport content services. MC.N now cooperates with Nokia on a number of levels. “We did some basic business studies with them,” says MC.N’s Janne Makinen.

“It’s kind of a two-way development cycle. They give us technical access and early releases of new products for us to develop new versions of our product, and we give them feedback of how things work. They also give us a live environment in which to test our solutions before we go to operators.” Makinen says he believes that Nokia’s involvement will play a significant role in MC.N’s development as a company, creating a need for MC.N products by delivering Nokia’s goal of a complete end-to-end system, from network to handsets to applications.

Another Nokia developer is Genimap (formerly Karttakeskus), which began cooperation with Nokia in 1996 when it released its first Communicator – Nokia’s hinged-brick PDA, aimed at the high-flying business and “poser” crowd (that’s Nokia’s own internal market-segment term). The first mapping products were popular address finders; the user entered an address and was served a digital map.

“There are different levels of cooperation,” says Mikko Salonen, CEO of Genimap. “In the beginning, it was very important for us to get cooperation on development tools – how to make WAP-based applications, and so on. Nokia gave us technical papers and documentation, but there was also a two-way exchange of technical information – we also gave our ideas to them and shared our views.”

Currently, Genimap is working with Nokia to develop location-based services such as “turn-left, turn-right” maps complete with street-level content. But Salonen stops short of saying that his company’s relationship with Nokia has changed his life. “The relationship has accelerated our business plan, and they are important for us, but I’m not willing to say this is so very extraordinary or different – they’re just a partner,” he says.

Nokia likes it that way. “In some cases, as with customer-specific services tailored and run for one operator, we might have an exclusive,” says Nokia 3G strategist Ilkka Pukkila, “but we would never go with one single application provider, for example rich SMS. Our strategy is to give operators as much choice as we can, but to offer value added – such as with the interplay between applications, like adding theater tickets to your datebook. We control the platform, and integrate the applications to suit the specific needs of the customer.”

Pukkila says very soon you and I will use our “personal trusted device,” a kind of handheld multimedia terminal to buy a Big Mac. Why would we ever buy a burger with the phone? Pukkila points out that is the wrong way of thinking. “You wouldn’t want to do it just out of the blue. But, for example, McDonald’s will have its own 3G wireless LAN in the restaurant, and when you walk in, you’d get, for example, messages about specials, which you could buy with your phone. And while you ate, you could view McDonald’s content. Or you could pre-order and pick up your paid-for meal with no waiting when you arrived,” he says.

To Nokia, it would seem, development of these kinds of applications will for the foreseeable future be left to the third parties, allowing Nokia – and McDonald’s for that matter – to pick the best of breed of every single app it buys. In fostering this climate, Nokia will likely never again have to say that the latest hot thing just never appeared on its radar.

In concentrating on the network vendors’ efforts to develop applications, we leave un-discussed, for now, the solidity of the model of UMTS as telecom savior. This could be far from certain. Industry analysts, notably those within Forrester Research, have been increasingly pointing to flaws in the revenue models the telecom operators are banking on. “There’s no killer application. There is no such thing. Let’s go for a killer environment. We don’t want to be bound by specific applications.”

This quote, from an executive at a European mobile operator, was featured in Lars Godell’s January Forrester report on the future of UMTS, which the report called “a survival question.”

“Of course it makes more sense for the equipment manufacturers to do the lion’s share of the application hot-housing,” Godell told Tornado-Insider, “But every operator must also have an open mind, to nurture niche and local applications developers as well as creating strong local partnerships.”

Forrester remains skeptical that, even with the hottest applications, incumbent European mobile operators as we know them today will survive the shakeout. Forrester predicts that by 2011, impending pressure from the network vendors to upgrade again to 4G technology will fuel a desperation to reach profits from UMTS amid an environment of saturated subscriber markets, continued spending on marketing and network upgrades and declining average revenue per user (ARPU).

Could it be that eventually the network vendors end up swapping gear for equity to bail out operators? Will forced consolidation result in the death of all independent operators and allow the survival of only the largest pan-European players?

Other analysts say that the Forrester report is overly gloomy and that it does not take into account the improved capital efficiency of investment in 3G as compared to 2G. But most agree that evolution, and indeed consolidation is not an unlikely prediction. “The shape of the mobile communications industry has not stopped evolving,” said Peter Knox, a telecom analyst at Commerzbank Securities, “and consolidation is probably a likely result.”