Things may finally be turning around for troubled satellite radio venture Sirius XM. Following a long and costly merger, the company became desperate for new financing just as credit dried up, and managed to avert bankruptcy only by selling 40 percent of itself to John Malone in exchange for a loan paying 15 percent interest. Last week, Sirius secured another half-billion dollars in high-interest debt, and CEO Mel Karmazin got a 20 percent raise and the option to buy 120 million new shares to celebrate his success.

Success, that is, if you define the word as simply avoiding failure. Things may be turning around, but Sirius XM has a long way to go before it finds true success. It needs to create a lot of new revenue to pay off all that debt. It needs to reverse the deterioration in the number of net subscribers that took place last quarter, when they fell 2.1 percent to 18.6 million. It needs to expand its allure beyond the car market, which will remain in a slump for the foreseeable future.

With the launch of Sirius XM’s iPhone app, the hope has emerged that the mobile market will provide the answer. The Sirius XM App is the fifth most popular download in Apple’s App Store, although the drop from the No. 3 spot since last week suggests demand is waning fast as current Sirius subscribers download it. That may help deter more subscribers from canceling their Sirius accounts, but will it lure in new ones?

To answer that, you need to ask whether there is a home for subscription-based satellite radio on mobile devices. Sirius XM subscribers pay between $9.99 and $19.99 a month, although the two most popular plans are priced at $12.95 and $16.95 a month. But to listen to satellite radio on the web, whether on PCs or mobile devices, costs another $2.99 a month.

New subscribers enticed by the iPhone app will need to shell out $240 a year for the music, and that includes strings such as awkward integration with the iTunes music store and no access to popular programs like Howard Stern or MLB Play-by-Play (meanwhile, MLB.com is starting to stream videos of select games as well as highlights of other games to the iPhone).

The problem is, other companies are showing that you can stream radio content to the iPhone — minus satellites — for a whole lot cheaper. Pandora, ooTunes, Wunder Radio, Slacker Radio and others stream music without monthly fees. None are perfect, but they are free. The future of mobile music looks like Spotify, which many consider the ideal music app and which is finding a home on Google’s Android phones. That could prompt Apple into allowing Spotify apps into its store, and that in turn could pave the way for other on-demand music sites like Rhapsody to follow.

The real allure of streaming radio on mobile devices isn’t just that we can avoid the commercials, bland playlists and inane DJ banter that pollutes the FM band. It’s that they can stream music more cheaply than costly satellite networks and, more importantly, that can be interactive, allowing we listeners to discover new music at will, to personalize and share playlists and to listen to what we want, when we want.

It’s taking some time, but it’s the direction mobile music is heading. It’s not, however, a world in which satellite radio can thrive. So Sirius XM is likely to remain what it is today — a very fancy car radio. And right now, that’s not a strong enough foundation on which to build a true turnaround.

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Join the most influential investors, mobile industry executives, entrepreneurs, press and analysts at MobileBeat 2009 for one day of in-depth discussion, debate and power networking, held on July 16 at the Parc 55 Hotel in San Francisco. MobileBeat will focus on apps: the people who use them, the people who make them, and the people who fund them. MobileBeat will also have a Top Startup competition and is actively soliciting submissions from startups younger than 3 years old and in two categories. These companies will get to pitch in front of a high-level audience: some 400 top mobile executives from startups and larger companies, venture capital firms, publishers, media, device makers and OS platforms. Startups can submit to be chosen for the competition here. Deadline for submission is July 1. Companies will be notified if they qualify on July 6.

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In 1988, “Saturday Night Live” aired a parody commercial deriding clumsy business models. “At First CityWide Change Bank, our business is making change,” said actor Jim Downey, portraying a naive “service representative.” After listing various ways in which his company could break a five, he explained how money is made. “The answer is simple: volume.”

More than 20 years later, I wonder if some digital entrepreneurs think the same. “Simple: we’ll make money on volume of traffic, at some future date,” they promise, even if the math doesn’t add up right now. Despite a knee-deep recession, the idea of giving away something for free and charging for something else later is bigger than ever. But is “free” selling?

Free
Although not the inventor, the chief evangelist of the “free” world is author and Wired editor Chris Anderson. Last year, before the recession hit, Anderson outlined his upcoming book in a cover story titled “Free! Why $0.00 Is the Future of Business.” A year and a half later, the final subtitle was changed to a less pretentious “The Future of a Radical Price,” “mostly because ‘why X is the future of business’ is now a cliche,” Anderson tells me.

The gist of his book: “People are making lots of money and charging nothing,” he writes (via the LA Times). In fairness, though, the idea of “Free” is a little misleading, since someone has to part with money so someone else can profit. “For most customers in the marketplace, the product is really free,” Anderson clarifies in an email. “The difference is who the paying customers are: advertisers or ‘premium’ users,” which effectively summarizes Anderson’s thesis.

The only problem? It’s difficult to cite thriving examples of either ad-sponsored or paid upgrades taking place online, at least when compared with the disproportionate amounts of money still being exchanged for offline goods and services. Google is the glaring exception, a web darling Anderson is quick to reference in his book. But even the search giant isn’t perfect — YouTube is a money pit, as part-time critic and full-time intellectual Malcom Gladwell notes in his dissenting review of “Free” for the New Yorker.

Obviously, Anderson is glamorizing a little with his endorsement of “Free.” His hardcover retails for $27. A subscription to Wired will still set you back $12 per year. And his Geek Dad blog, an admitted labor of love, is hardly capable of piquing investor interest (at least not yet), despite Anderson’s suggestion that the site is another successful example of the “Free” model.

But Anderson isn’t the only wordsmith endorsing a “Free” future. Well-read business author Seth Godin tells me, “There are 100 great companies that are using generosity as a scalable business.” He didn’t name names, but I’m sure success stories exist. Nevertheless, Godin isn’t as hasty to call “Free” the next big thing. “It is a future business model, not the future,” he emphasizes. “It’s so easy to misunderstand Anderson’s point.” Indeed.

Paid
So if “Free” is one way to skin a cat, does “paid” have an online future? For example, how about charging RSS subscribers, who enjoy instant delivery of trusted content to their “doorstep” without having to go out of their way to find it elsewhere? Anderson says no. “I doubt content companies can charge for RSS. Your content has to be incredibly unique and valuable, which may describe Bloomberg but not the average media site.”

Godin also balks at the idea, calling it shortsighted. “It’s like charging someone to go on a date. If your goal is to get married, why on Earth would you do that?”

I was unable to find working of examples of paid RSS subscriptions for this story. But there has been a cottage industry of paid newsletters since email was popularized in the ’90s. And the capitalist pig in me can’t help but think how much a 3 percent to 5 percent conversion of paid subscribers might yield. If only someone were willing to jeopardize their subscribers and try it.

Perhaps my suspicions of “Free” would have been obviated had that living, breathing economy decided not to exhale. But exhale it did, and here we are wondering what can be done to exploit the growing popularity of the Internet during times of uncertainty, amid a myriad of nascent, sometimes under-performing business models.

So until products like Facebook, Twitter and YouTube start operating on earned income instead of venture capital, the Internet might need to move to a paid system, especially if we hope to sustain intellectual property and original content produced by reporters, artists and entertainers. We might even be able to do it the old-fashioned way — you know, enticing a prospective customer into your “store” with an incredibly compelling product. Then selling it to them. Like cable TV.

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The launch of Apple’s new iPhone 3GS was the best sales day ever for AT&T’s retail stores, while the number of orders taken at its online store also hit an all-time high, according to an internal memo obtained by MacDailyNews, a blog devoted to all things Apple. While the memo doesn’t outline the precise number of devices sold, it does reveal other details.

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008 — all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

Apple sold a million iPhones the weekend of the 3GS launch. A survey by Piper Jaffrey shows that nearly 56 percent of iPhone 3GS buyers were upgrading from the old device and only 28 percent were switching to AT&T — but that’s still about 280,000 new subscribers that will be handing over a lot of money to the carrier. As I pointed out in a previous post, “[T]he average iPhone user gave AT&T about $94.74 a month vs. an average postpaid AT&T customer, who spends about $59.21 a month.”

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Millions of people logged onto the web when the news of Michael Jackson’s sudden death broke last week, and they’re continuing to flock to eBay to get their hands on the pop king’s memorabilia. The online auction site said it’s since seen the percentages of daily searches, listings and sales of Michael Jackson memorabilia rise dramatically.

As of yesterday, eBay said the number of searches for Michael Jackson items had surged 235 percent over the week prior to his death. People are apparently looking to profit off their old Michael Jackson loot, too — new listings of such gear is up 57 percent.

Michael Jackson dolls have risen in value as much as 450 percent to sell for about $120, according to Vendio Research, which provides market research for eBay sellers. With the advent of iPods, however, a vinyl version of the iconic “Thriller” album is only going for about $70. But sales of single white gloves have gone through the roof, Vendio said, with 352 sold last week alone on eBay vs. the prior average of five a week.

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Akamai today said it would provide adaptive bit-rate streaming to deliver video content from web sites to the Apple iPhone 3G and devices running the iPhone OS 3.0 operating system. Basically, using adaptive bit-rate streaming means folks can watch streaming video on their iPhones or iPod Touches with fewer stops and starts. Adaptive streaming adjusts the video content to a lower or higher bit rate, depending on how robust the web connection is. Akamai offers a similar service for Microsoft’s Silverlight for video on PCs. Adobe Flash and Move Networks also offer adaptive bit-rate streaming, although Adobe uses a proprietary method that requires special servers.

Apple and Akamai are bringing the service to the mobile world, which will be great for dealing with the many variances in mobile data connections, and will provide for smoother video delivery over dodgy networks. Videos can run in the Safari browser, so they don’t even require a special app that AT&T, the carrier that provides service for the iPhone in the U.S., might try to block. For more details on this, check out the awesome story Liz did about HTTP video on the iPhone or her in-depth look at adaptive bit-rate streaming over at our subscription site, GigaOM Pro. For pretty video streaming, check out Apple and Akamai’s  show-and-tell site.

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Will Michael Jackson’s funeral be live-streamed? (NewTeeVee) Is Obama building new energy policy council with cleantech leaders? (Earth2Tech) Must-have iPhone apps for air travel (WebWorkerDaily) 14 free iTunes visualizers (TheAppleBlog) With the rollout of Symbian’s OS platform, expect a shakeout (OStatic) MIA: One of the few apps in Palm Pre App Catalog (jkOnTheRun)
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As MySpace struggles to regain ground it’s lost to Facebook and sort out its revenue woes, executive departures from MySpace Latino, a combination Spanish-English site targeted at U.S.-based Latinos that launched a little over a year ago, indicate it may be on the chopping block. MySpace Latino’s VP of Hispanic sales and strategy, Manny Miravete, has left the company, and the site’s managing director, Victor Kong, has reportedly left as well. The site itself hasn’t been refreshed in over a week amid a wave of layoffs at MySpace’s U.S. and international offices.

When asked if it planned to shut down MySpace Latino, the company sent us this statement (bolded emphasis ours) via email:

“The MySpace Latino community will remain live and not shut down. We are restructuring and evaluating how Latin will be featured on our site as we know the importance of the genre. Before the launch of MySpace Latino, we frequently featured Latin artists, promotions, and events on MySpace Music and will continue to do so.”

The News Corp-owned social networking site created MySpace Latino to target its growing population of U.S.-based Latino users and make it easier for big-name corporations such as McDonald’s and Toyota to advertise to them. Nearly 14 percent of MySpace’s U.S. users are Latino, compared to just 5 percent of Facebook’s, according to Quantcast.

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Germany’s Yello Strom might be the coolest utility in the world — it’s embraced the intertwining of energy and home broadband connections and is one of the few that manages its smart meter service directly via its customers’ broadband link. That means it can easily offer consumers web-style smart meter applications, including Google’s PowerMeter energy management tool, and potentially a twitter feed of energy consumption.

From Yello Strom’s perspective, leveraging broadband is cheaper than building a new network or renting space on a phone company’s network, and can be more engaging to users because the system can update data faster and offer more compelling consumer services. It’s the future of the energy industry, says Martin Vesper, Yello Strom’s executive director, and customers have to be engaged with the product to change their energy consumption behavior. We’ll see how committed customers are, as Yello Strom only started selling and renting its smart meters seven months ago, but Vesper said it’s selling about 100 to 200 smart meters a day.

The scenario in Yello Strom’s market is very different than the U.S.: Germany’s electricity industry is deregulated (i.e., competitive). In the U.S. (which is largely regulated) smart meters are being rolled out by early moving utilities looking to tap stimulus funds and convince customers to use less electricity, mostly so they don’t have to build more expensive power generation. U.S. customers won’t be choosing whether or not they get a smart meter, and there are little or no fees associated with the technology (sometimes a slight monthly rate hike). So while the smart meter rollout could go much faster in the U.S. than in Yello Strom’s footprint, the customers who buy Yello Strom’s meters have a greater chance of actually changing their energy consumption behavior.

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Updated: Today we’ve received an email and seen multiple tweets alerting us to the fact that Google’s App Engine software development platform is down. We’ve emailed the company for details, but in the meantime, a check of the App Engine status page won’t even load at 11:30 a.m. PDT, and updates on the site indicate that it’s been put into unplanned maintainance mode after experiencing problems this morning.

Update: A Google spokeswoman tells us that the service was down because of a storage issue. She emailed a statement that read: “Today at 8 am PT datastore access for App Engine applications was affected due to a cluster-wide issue. The team identified and fixed the underlying problem and service has now been restored. We apologize for the inconvenience and encourage anyone having technical difficulty to visit the System Status Dashboard or the Downtime Notify Group, which are both linked from the Google App Engine Community site.”

We’ve seen several complaints about the impersonal way Google seems to be handling this, criticism that certainly may cause the company harm in its quest to woo the enterprise to its platform. Readers, can Google keep App Engine flying?

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Several marketing associations supported by Google have banded together and released seven principles that they believe should govern online privacy. Are you ready for a journey to the Emerald City? Because the principles are the online advertisers’ attempts to stave off government regulation around protecting consumers’ online privacy by diverting attention to the Great and Powerful Principles rather than the data scavenging that’s going on behind the curtain. Kind of like a certain self-aggrandizing wizard.

Given that Congress has been keen to see opt-in programs, and there’s no mention of that in these principles, my hope is that regulators won’t be taken in by this, and will still fight for better disclosure of advertising practices and an opt-in program. In the meantime, let’s pull back the curtain and check out what the wizards of marketing are telling us. Below are the marketing principles taken directly from the position paper — and in italics, what they really mean:

1. The Education Principle calls for organizations to participate in efforts to educate individuals and businesses about online behavioral advertising. To this end, the digital media industry intends, in a major campaign that is expected to exceed 500 million online advertising impressions, to educate consumers about online behavioral advertising, the benefits of these practices and the means to exercise choice, over the next 18 months. (We’re gonna show you a lot of ads about how we want to invade your privacy, but since we’re making them, we’ll make sure they don’t scare you into opting out.)
2. The Transparency Principle calls for clearer and easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising. It will result in new, enhanced notice on the page where data is collected through links embedded in or around advertisements, or on the Web page itself. (Don’t block our ads or you may miss valuable information about how we target these ads to you.)
3. The Consumer Control Principle provides consumers with an expanded ability to choose whether data is collected and used for online behavioral advertising purposes. This choice will be available through a link from the notice provided on the Web page where data is collected. The Consumer Control Principle requires “service providers”, a term that includes Internet access service providers and providers of desktop applications software such as Web browser “tool bars” to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes. (Remember that notice near those ads you were blocking? You’re going to have to click through that in order to opt out. As for all you ISPs, web application companies and tool bar providers out there, you’re actually going to have to make users opt in.)
4. The Data Security Principle calls for organizations to provide reasonable security for, and limited retention of data, collected and used for online behavioral advertising purposes. (Please ignore the fact that we’re not using anything descriptive here to define reasonable security, the type of data collected or how long we plan to keep it)
5. The Material Changes Principle calls on organizations to obtain consent for any material change to their online behavioral advertising data collection and use policies and practices to data collected prior to such change. (When we decide to collect more information from you, we’ll tell you about it, maybe through an opt-in box that pops up right before you want to get access to something important, like your email. It could read: “Before we provide access to your inbox, click here to acknowledge these several pages of fine print about your privacy.”)
6. The Sensitive Data Principle recognizes that data collected from children and used for online behavioral advertising merits heightened protection, and requires parental consent for behavioral advertising to consumers known to be under 13 on child-directed Web sites. This Principle also provides heightened protections to certain health and financial data when attributable to a specific individual. (We know there are some things that will really tick people off, like advertising to kids and selling ads based on confidential medical data, but since kids are so impressionable, if we can get them to ask a parent for permission then we’re going do it.)
7. The Accountability Principle calls for development of programs to further advance these Principles, including programs to monitor and report instances of uncorrected non-compliance with these Principles to appropriate government agencies. The Council of Better Business Bureaus and Direct Marketing Association have been asked and agreed to work cooperatively to establish accountability mechanisms under the Principles. (It’s like relying on the Do Not Call List to block telemarketers. That always works out well, doesn’t it?)

To be fair, there will likely be some sites that go above and beyond these principles to protect users’ privacy, just like there will be some that will ignore them and troll for as much information as the gullible masses are willing to provide. I may be too cynical here, but in my experience, self-regulation doesn’t work when one side has a lot to gain and the other side is pretty ignorant about what that side is doing. I’m not going to put my toddler alone in a room with a bowl full of candy and expect her to self-regulate, just like I doubt that advertisers and Google are the best stewards of my privacy online.

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In the market for a new TV? These days, there are bargains galore, especially when it comes to those with plasma screens. The Wall Street Journal reports that the growing popularity of their LCD cousins has TV makers such as Pioneer and Vizio phasing out their entire plasma TV line-ups. Others may soon follow suit. (Read an alternative take on the future of Plasma TVs.)

One can hardly blame them — there were 30 million LCD TVs sold in the U.S. in 2008 vs. 4 million plasma TVs, according to Display Search, a market research company. That’s quite a comedown for a technology that once represented the cutting edge of the display market.

Plasma is made of cells. Each cell is essentially two plates of glass filled with neon-xenon gas that is electrically charged, which then strikes phosphors on the screen and that in turns displays the image. LCD panels in comparison are made of two layers of transparent material where one of the layers is coated with a special polymer that holds liquid crystals. Electric current is passed through these crystals which either pass the light or stop it, there by creating an image. (From About.com)

I remember when plasmas trumped LCDs by a mile, both in terms of picture quality and viewing angle. There were some problems with them, of course — they generated too much heat and static images burned into the screen, limiting their lifespan. They’ve since improved a lot, but so have LCDs, which by comparison have better contrast, sharper images and higher refresh rates. NewTeeVee back in February saw the demise of Pioneer’s Kuro TV line-up as a sign that plasma TVs would go the way of the buggy whip.

I paid an ungodly amount of money for a 42-inch plasma screen TV in 2002, only to sell it on Craigslist for a third of that price when I moved to San Francisco in March 2003. It taught me a valuable lesson: Televisions (and most consumer electronics) lose value really quickly, so there’s no point in overpaying by buying the latest and greatest. (I leave that for cell phones, computers and headphones.) Today, I have a 50-inch Panasonic LCD TV — not exactly the best on the market, but it does a fine job as a display for my DVD player and my Apple TV.

Now I’m getting ready to move to a bigger apartment. This would give me a chance to buy another television, this time for the bedroom. I’m thinking about buying a cheap plasma TV — just for old times sake. After all, it will be obsolete by the time I’m ready to move again so I won’t feel that bad about losing my investment.

P.S.: In case you’re still wrestling with which TV — LCD or plasma — to buy, CNet has a handy comparison guide.

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Orange, a UK ISP and mobile phone company, is reportedly close to signing a deal with an ad-supported mobile virtual network called Blyk that would offer certain Orange customers credits on their service in exchange for receiving text-based ads on their mobile phones. According to an article in New Media Age, Orange has been in talks with Blyk for months to offer subscribers aged 16-24 credits of £15 ($25) if they receive ads on their phones. The partnership looks similar to an effort by German carrier E-Plus to offer lower-cost mobile phone service to customers in exchange for ads.

Customers are asked to detail certain personal information when they sign up for the Blyk service, which is then shared with advertisers that use it to deliver targeted ads. I have little doubt that people in the desired age range would give up a bit of their privacy in exchange for cheaper phone service, and Orange could possibly see profits from advertising. Like, many ISPs and carriers, Orange has been looking at ways to offer advertising. It may also use this as a way to attract new customers who would graduate to an ad-free version of its service, although depending on how many ads subscribers viewed and how well the campaigns worked, perhaps selling eyeballs would be more valuable than selling phone service. My guess is that so far it isn’t. Blyk originally resold mobile service with the goal of delivering ads to its customers, but later backed off of that model, possibly because they couldn’t make enough money selling ads.

However, as mobile operators and ISPs try to mine the rich amount of customer data they have access to without alienating their subscribers, an opt-in program in which young adults sell their attention for credits on mobile phone service looks like something consumers would accept. Although there’s a certain irony in targeting ads at a group that’s too cheap to spring for ad-free cell-phone service, I wonder how long it will take to cross the pond into the U.S.

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When a web application gets popular enough, features matter less and the underlying ecosystem matters more. There’s a tipping point at which network effects outstrip software features. When that happens, users get the benefits of additional functionality — and the risk of new kinds of lock-in. Salesforce.com, for example, started as a replacement for in-house software. Now it’s a software ecosystem complete with a programming language, developer conferences, and a marketplace for third-party developers. That makes Salesforce a lot harder to leave than if it were just a bundle of software features.

Freshbooks, whose SaaS-based billing tool tracks time and expenses and sends invoices to customers via email or post, is at that tipping point. It’s grown to 900,000 subscribers using a mix of free and paid offerings. Now that there are so many users, subscribers often wind up sending bills to one another. So the company made it possible to send those invoices within the system directly, bypassing external email. Today, Freshbooks revealed that 20 percent of its subscribers had adopted this new capability — taking Freshbooks from software tool to SaaS ecosystem.

Is this how freemium pays off? In “Free,” Chris Anderson speculates that information-based businesses won’t make money from what they do, but rather because of what they do. Here, Freshbooks may not make money from every subscriber — but it can offer compelling new features because of them.

Once a SaaS provider hits a certain size, secondary business models based on network and ecosystem effects can eclipse the initial business. This makes the economics of running a SaaS provider a bit strange: Too much focus on short-term revenues may undermine long-term success, because free helps reach critical mass, where new models can emerge. At the same time, network effects may make it hard to launch a new SaaS offering, since early players can erect significant barriers to entry.

For SaaS customers, this portends a new kind of lock-in. SaaS promised us freedom from the proprietary formats and costly, custom deployment efforts of enterprise software, but network effects can constrain subscriber choice and make it hard to leave. If you want access to Salesforce’s ecosystem, you have to use Salesforce.

Freshbooks CEO Mike McDerment, understandably, maintains that network effects are more about added benefits to end users than about lock-in: “If you can add a feature that’s not possible without a network, and there’s sufficient value offered by that network, then it’s worth it to stay on the network.”

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The two national agencies responsible for allocating $7.2 billion in broadband grants as part of the stimulus bill today released the rules governing the process and said the government would provide about $4 billion in loans for the first of three funding rounds. That money will start flowing to projects in November. It’s a bittersweet moment for folks hoping for better broadband in the U.S., as the rules don’t mandate faster speeds or abide by current net neutrality regulations, but will send a lot of money to both states and private companies hoping to build out Internet access.

First off, the definition of broadband in the rules is set in the last century — defining it as advertised speeds of 768kbps down and 200kbps up. Senior administration officials said on a conference call today that the broadband bar was set low in order to ensure that difficult terrain and sparsely populated areas of the country could still apply for grants. Since I’ve written about satellite providers that can deliver 1.5Mbps down (or at least advertise that they do), I’m not impressed with this reasoning.

However, a senior official said that applications for funds will be judged on the speeds they offer, so presumably, a firm offering a fiber connection to the same amount of people may fare better than a project that is pushing DSL, but multiple other factors such as cost will come into play. As for net neutrality, the rules state that all of the projects will have to at least meet the net neutrality guidelines set forth in the FCC’s 2005 broadband policy statement, which may anger some ISPs. It’s unclear, however, if projects will be held to the standards of any future net neutrality proposals that may be adopted.

The rules do allow broadband money to go to private companies as well as nonprofit agencies (at one point, there were concerns that only nonprofits would reap the cash), but individual states will have the chance to vet projects and submit feedback on them. The agencies will also split their funding between underserved and unserved areas, which was another big point of contention.

So let’s do a quick breakdown here of how the first wave of funding will play out. The Department of Agriculture has $2.3 billion it plans to allocate through the Rural Utilities Service: $400 million in grants and $800 million in grants and loans will be allocated toward last-mile services that connect to a consumer’s home; $800 million in loans and grants will be available for the middle mile; and $325 million will be kept in reserve to fund worthy projects in either of the above categories. RUS grants will go only to rural, remote and unserved areas, while loans will go toward rural, remote and non-remote, underserved areas.

The National Telecommunications and Information Administration has $1.6 billion it plans to dispense as grants, with $1.2 billion allocated to provide last- and middle-mile services to unserved and underserved areas that meet one of several possible criteria, $50 million for computer centers, $150 million to drive broadband demand, and $200 million held in reserve to spread among the three segments if needed. Applications will be accepted between July 14 and Aug. 14, and finalists will be chosen by Sept. 15. The money will start flowing to accepted projects by Nov. 7.

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Facebook is testing a set of changes to its privacy settings that will make it easier for folks to control what they share and with whom. Essentially the Palo Alto, Calif.-based social network is betting that if its users have more control over privacy, they’ll share more. To be sure, the current privacy settings are made up of many unnecessary layers. As part of the test, Facebook will be asking a small group of users to “revisit and reaffirm” their privacy setting using a so-called “transition tool.” As Chris Kelly, Facebook’s chief privacy officer, explains in a blog post:

The test we’re launching today will include a small fraction of the total number of people on Facebook. This group will receive the new, simpler settings and one of six different versions of the Transition Tool. Over the next few weeks, we’ll be collecting direct feedback from the testing group and using it to make improvements to the tool. Our goal is to ensure that people understand the changes to our privacy settings and make choices that reflect their comfort level. After the testing and feedback phase is complete, we expect to offer final versions of the tool and the new settings to everyone on Facebook.

While Facebook said the transition tool won’t encourage users to share more information than they really want, it will definitely cause some to pause and rethink what their current settings are and may spur some to make certain information more or less public. Here is Facebook’s presentation outlining the current changes.

Facebook Privacy Enhancements

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Globalstar today closed on $738 million in financing, while rival satellite operator TerreStar launched its new bird, TerreStar-1. Globalstar plans to use its money to fund operations and launch a new generation of satellites in 2010 that will deliver all IP-based voice and data to its customers through 2025. Before celebrating, know that Globalstar’s new constellation of satellites will  provide speeds of up to 256kbps down.

Like the slow data speeds, the financing is less exciting than it first appears. It mostly comprises a previously announced credit facility, which Globalstar will have to pay back. The financing combines the $586 million credit facility with convertible debt and warrants for $55 million, and a deposit by its majority shareholder of $60 million into a contingent equity account. The financing also includes funding of a debt service reserve account. Basically, Globalstar has a large credit line, and someone fronted the company the money to fill a reserve account in case some of that debt can’t be paid. That’s a position Globalstar has been in before. It filed for bankruptcy in 2002 and emerged from its financial failure in 2004.

While Globalstar plans to launch multiple satellites next year, TereStar today flung its single, huge satellite into space after a few delays. We’ve written about the capabilities of TerreStar’s new bird, as well as our doubts about the business of providing satellite data services to a consumer audience as TerreStar hopes to do. TerreStar-1 will be able to deliver speeds of 64kbps down to the smaller, consumer-style handsets, while truck-mounted phones such as those used by emergency workers could receive speeds of up to 400kbps down. But satellite service is expensive (and slow) compared with other available mobile data services, and few people really need the kind of coverage satellites provide. The industry went bankrupt en masse before, and I find it hard to believe it will fare well this time around, especially without some consolidation. However, like the orbits of their satellites around the Earth, I’m concerned these companies can’t stop coming around again.

Image of TerreStar-1 courtesy of Arianespace.

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If you use self-described “web site traffic and promotion company” uSocial.net to buy votes on Digg and StumbleUpon, you’ll be thrilled to know it’s expanded its service to Twitter. For just $87, uSocial will generate an additional 1,000 Twitter followers to the account of your choosing. Sweet! Ratchet up your order to more than 5,000 new Twitter followers and you’ll even get a discount.

The press release announcing the service kind of says it all. Though you have to give the team at uSocial a little credit — at least they’re being up front about what they’re doing:

First it was popularity on social bookmarking sites like StumbleUpon that was being sold and now Twitter is in the sights of those looking to have their fame and status artificially increased.

Web traffic and promotion company uSocial.net – who famously received and ignored a Cease & Desist order from Digg after selling votes on the site – have just launched a service allowing Twitter users to purchase packages of followers if they are having trouble attaining them on their own.

The future of mobile: GigaOM Pro provides insider perspectives and analysis on the trends defining tomorrow’s mobile market. Learn more »

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