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The December 13, 2009 Issue Provided by System Dynamics Inc.
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In This Issue

Heard on the Net

Briefly Noted
Updates, Observations and Trends

TelcoTV 2009 -
The Changing Face of TV

Deja Vu All Over Again

Partners' Connected Health Symposium 2009 -
Moving To the Mainstream

Upcoming Conferences


Heard on the Net

News about People and Companies Influencing The Broadband Home


People News

Steve Craddock has become EVP and CTO at PCT International. Craddock was previously in the Office of the CTO for Comcast Corporation. ( www.pctinternational.com )

Andreas (Andy) Melder has joined Gigle Networks as VP Business Development, concurrent with the company changing its name from Gigle Semiconductor. Andy has extensive experience in home networking, having previously been with Intellon and Staccato.( www.giglenetworks.com )


Company News

Investments

Arteris has raised the first tranche of a strategic investment round totaling $9.7 million from a group of investors led by Qualcomm Incorporated and including ARM. ( www.arteris.com )

Clearwire Corporation is raising more than $1.5 billion in new investment capital in exchange for newly issued shares priced at $7.33 per share. The sources of new financing and their approximate contributions include: Sprint Nextel with $1.176 billion; Comcast with $196 million; Time Warner Cable $103 million; Intel $50 million; Eagle River $20 million; and Bright House Networks $19 million. ( www.clearwire.com )

WiMAX provider DigitalBridge has raised undisclosed financing from new and existing investors. ( www.digitalbridge.com )

IPWireless Inc., a ten-year-old mobile broadband technology company, has raised a $15.5 million Series A round. It has gone through previous funding and acquisition but is now being run by some of the original founders. ( www.ipwireless.com )

picoChip has completed a $20 million funding round. ( www.picochip.com )

Sezmi has announced $25 million in additional financing. ( www.sezmi.com )

Verizon Wireless is leading a new effort called the 4G Venture Forum in which venture capital firms will invest as much as $1.3 billion to identify and commercialize next-generation 4G-related technologies (Long Term Evolution, or LTE). ( www.verizonwireless.com )

Xirrus which makes Wi-Fi systems for use inside buildings, said it is finished with fund-raising after bringing in an additional $20 million from inside investors. ( xirrus.com )

Acquisitions

Comcast and GE are forming a content joint venture initially owned 51% by Comcast and 49% by GE. GE is contributing its interest in NBC Universal to the new JV and Comcast will contribute its cable channels, regional sports networks and two Internet assets. Comcast will pay GE approximately $6.5 billion. ( www.comcast.com ) ( www.ge.com ) ( www.nbcuni.com )

Google is buying mobile advertising network specialist AdMob in an all-stock deal valued at $750 million. ( www.google.com ) ( www.admob.com )

Kudelski Group said it has completed a tender offer to acquire 60 percent of OpenTV. Added to its current ownings, Kudelski will have 91 percent of the voting rights in OpenTV. ( www.kudelski.com ) ( www.opentv.com )

Liberty Global is acquiring Unitymedia GmbH, Germany’s second-largest cable operator for an equity purchase price of €2.0 billion ($3.0 billion). ( www.lgi.com ) ( www.unitymedia.de )

Motorola has signed a definitive agreement to acquire BitBand, a provider of content management and delivery systems for IPTV video on demand. ( www.motorola.com ) ( www.bitband.com )

NetStreams has been acquired by ClearOne for an undisclosed amount. ( www.netstreams.com ) ( www.clearone.com )


Other News

Broadcom announced a new set-top box system-on-a-chip solution enabling interactive HDTV, connectivity, whole-home media distribution and advanced 3D user interfaces. ( www.broadcom.com )

A new initiative called One Voice, formed by 12 mobile operators, has agreed to use a profile based on IMS (IP Multimedia Subsystem) for offering SMS (Short Message Service) and voice services over next-generation mobile network technology LTE.

TiVo and Virgin Media have entered into a mutually exclusive agreement under which TiVo will develop a converged TV and broadband interactive interface to power Virgin Media's next-generation HD set tops. Virgin Media will be the exclusive distributor of TiVo services and technology in the UK. ( www.tivo.com ) ( www.virginmedia.com )


Standards and Organizations

The 1394 Trade Association is formally assuming the assets of the High Definition Audio-Video Network Alliance (HANA) effective immediately. ( www.1394ta.org )

The 3D@Home Consortium released two documents, ST4-01 3D Glossary and ST4-02 3D Technology Family Tree Poster, aimed at defining and documenting emerging technologies that enable 3D to the home. ( www.3dathome.org )

HomeGrid Forum announced that the ITU-T G.hn workgroup completed its definition of a "low complexity" profile targeted at Smart Grid applications. ( www.homegridforum.org ) ( www.itu.int/ITU-T/index.html )


Countries

U.S.

The US Federal Communications Commission (FCC) initiated a Notice of Proposed Rulemaking regarding so-called "net neutrality," aimed at prohibiting discrimination against certain Internet traffic. Comments are due January 14, 2010 and reply comments are due March 5, 2010. ( www.fcc.gov )

Under newly-developed California smart grid legislation (Senate Bill 17) the California Public Utilities Commission (CPUC) is required to outline a specific smart grid deployment plan by July 2010. Additionally, all electric utilities with over 100,000 customers must submit a smart grid strategy plan by July 1, 2011.


Briefly Noted: Updates, Observations and Trends


Briefly Noted

Each month, we collect miscellaneous happenings, studies, trends or observations you might have missed. This month's briefs focus on market forecasts, interactive TV in the UK, 4G patent holders and more.

Fixed and Mobile Subscribers Market Forecast

Infonetics Research released the highlights from its new Fixed and Mobile Subscribers market forecast report, showing that:

  • There were nearly 4 times more mobile subscribers than access line subscribers worldwide in 2008 (3.9 billion vs. 1 billion)
  • The number of mobile subscribers grew 17.4% in 2008 over 2007, while access line subscribers declined 5.5%. Access lines are disappearing fastest in North America and China.
  • The number of worldwide mobile subscribers will reach 5.9 billion by 2013
  • The number of PON FTTH subscribers worldwide is expected to increase at a compound annual growth rate of 32% from 2008 to 2013. ( www.infonetics.com )

Interactive TV in the UK

We've always thought of the UK as the home of "red button" interactive services, so the results of a recent survey were quite a surprise. According to a survey by Opinium Research for Moneysupermarket.com, 45% of UK adults (20m) have never used interactive TV, of which 19% (9m) cited a fear of costs as their reason. 13% of UK viewers claimed to have no idea of what the Red button Service offers. On the flip side, of those currently using the service, 28 percent claimed it was one of the best TV innovations ever.

GSA Statistics

The Global Mobile Suppliers Association reports that LTE (mobile 4G) network commitments are growing rapidly. The report indicates that there are 51 LTE network commitments in 24 countries, up to 19 LTE networks will be in service by yearend 2010, and up to 36 LTE networks should be in service by yearend 2012. ( www.gsacom.com )

U.S. Broadband Status

The FCC requested two independent studies as part of their development of the National Broadband Plan. Drafts of the Berkman and CITI studies have been released and placed on Public Notice.

4G Patent Holders

ABI Research's analysis of 4G patent holders concluded that Qualcomm appears to be the current leading patent holder in 4G wireless communications. Other notable players include Interdigital, Huawei, LG, Nokia and Samsung. ( www.abiresearch.com ) ( www.qualcomm.com )


TelcoTV 2009 -- The Changing Face of TV

In November we took time out from our vacation in southwest Florida to attend the TelcoTV Conference in Orlando. TelcoTV is a good place to get a feel for the evolution of IPTV and the evolving aspirations of telcos large and small.

This year, we came away with a better understanding of their aspirations to "lock in" the customer to their full range of triple- and quadruple-play services. We also learned about the rapid evolution of 3D TV, the expanding role of the Broadband Forum, and one approach to providing an easy-to-navigate guide to the rapidly expanding content on the TV set.


Owning the Customer

The TelcoTV Conference is a fascinating mix of giant players like AT&T and little guys like Nsight. Close your eyes during their talks and you'd expect to tell which one is speaking.

Rob Riordan, EVP at Nsight (2nd from left) --> Click for larger pictureWe'll paraphrase a vision from one of them: "We'll be offering both TV services and 3G. .... We want to provide a femtocell in the home, so when you come home from work it recognizes your presence. Your phone interface changes to your in-home view and the movie you selected to download to your phone loads over your home Wi-Fi."

We were startled that this vision came from Rob Riordan, EVP and Director of Corporate Development of Nsight, rather than a company like AT&T. Riordan made clear that he is a fan of providing complete solutions to customers--he said the goal was to "make it very simple and impossible to leave." Holding up his iPhone, he said admiringly "They own me." He was frank in aspiring to have Nsight do the same.

Jeff Weber, VP Video Services, AT&T --> Click for larger pictureBy contrast, the message from Jeff Weber, VP Video Services, AT&T, was TV-centric. He emphasized that "Everything starts with TV" and "You have to be great in TV". Weber talked about U-verse's capability to record 4 streams of video and provide total home DVR. He also mentioned being able to schedule your DVR from your phone or PC and that DVR is included without extra charge in most packages.

The "Any" Theme

Weber also had a "futures" story about "U-verse Everywhere"--AT&T customers will be able to consume and control content on any screen and see related content on any device. Weber believes U-verse is a powerful platform for integrated IP services--75% of U-verse subscribers already have a triple-or quad-play package.

"Any video any device" at RGB --> Click for larger picture"Watch your TV Anywhere" from Echostar --> Click for larger pictureThe "any" theme was repeated in several talks and portrayed in many booths.

Brook Longdon, Head of Global Home Entertainment of Nokia Siemens Networks spoke in terms of an expanded user experience anytime, anywhere, on any device. He distinguished between:

  • Service Convergence: Same services from different sources on different devices (any content, any device)
  • Service Portability: Same services on multiple devices within home network, and Service Mobility: Same services on multiple devices outside home network (any device, anywhere).
  • Session Continuity: You can watch a movie in your house on the TV via IPTV and pick up where you left off on your mobile phone as you leave the house. This implies a common subscription in the set-top box and mobile phone worlds.

All of the above seems premised on the assumption that you have one service provider for your mobile, TV, phone and Internet services.

TV Everywhere -- The Entitlement Enablers

"TV Everywhere" is all about keeping the value in valuable content. Today, video subscribers pay for content, but can consume it only on their TVs in their homes (unless they have a Slingbox type device). With TV Everywhere, video subscribers would be able to access their content not only on the TV in their home, but also over the Internet and via their mobile phones. Underlying the ability to get protected content to authorized users are a wide variety of "entitlement enablers".

Jim Brandt, Director TV/Video at Synacor and Chris Drake, Senior Director of Business Development, thePlatform, spoke about the mechanics of entitlement. Several steps are involved, including securely identifying a user (authentication), mapping the user to what they have access to (authorization), and applying existing policies to these new access rights (entitlement). Ideally this will involve a common and consistent user experience across devices.

Myriad issues arise when attempting to implement TV Everywhere. These include working out licensing deals between service providers, content owners and other rights holders; increased IP video traffic on broadband service providers' networks; and the implications of potential FCC net neutrality rules on the types of deals that video service providers can make with content providers.

Other questions include whether DVR functionality is feasible on any device; whether content is streamed, downloaded, or both; what user intervention is required for authentication and authorization. Content presentation and audio quality need to be adapted to match the capabilities of the end devices and preserve the best end-user experience.

Last, but far from least, is the issue of audience measurement. That metric drives ratings and therefore advertising revenue. If viewing shifts from on-air to online without audience measurement metrics, there will be very negative effects on ad revenue.

Service providers are starting to roll out beta versions of "everywhere" offerings. A few weeks ago Rogers Communications announced the beta release of Rogers On Demand Online. Any customer with a Rogers account can visit rogersondemand.com and register to experience Rogers On Demand Online content free from any streaming Internet connection within Canada.

MSOs are vocal about their support for TV Everywhere, so we hope they have solutions to the many issues the service raises.


3D TV

Title screen for "Avatar" --> Click for larger pictureTelcoTV included a session and several exhibits on 3D TV. The upcoming release of James Cameron's Avatar will be a big deal in focusing attention on this emerging content form.

News releases about 3D come with increasing frequency--for example:

  • Up to 25 of the 2010 FIFA World Cup matches in South Africa will be produced in 3D.
  • Reliance Mediaworks has partnered with In-Three Inc. to set up the world’s largest 2D to 3D conversion facility in India. The project will start in February 2010.
  • LG Display has begun mass production on their Full HD 3D LCD monitor, a 23-inch display with 1080p resolution, with an initial focus on video games.
  • Sony will add 3D capability to its PS3 gaming console via a future firmware update
  • BSkyB has promised to launch a channel devoted to 3D content next year
  • HDlogix had the first public demonstration of their real-time conversion of 2D HD video into 3D this weekend; it will be on view at CES.

Judging from some sessions at Telco TV, lots of issues remain to be resolved. Standards are a key piece of this:

  • Will the glasses ("eyewear") be "passive polarized" or "active shutter"?
  • Is the transmission format one that combines the left and right eye images side by side in a single interlaced frame, or a sequential display of a full frame image for each eye?
  • What format makes the most sense for distribution over existing cable and IPTV infrastructure? Does it take a lot more bandwidth than today's HD? Can it be supported by today's set tops?
  • Which organization will define the standard(s)? Contenders include CEA, SMPTE, DVB, CableLabs, Blu-ray Disc Association, 3D@Home Consortium, etc.

There are also many issues beyond standards:

  • What are the impacts of eye-strain and fatigue, as well as possible unpleasant side effects like nausea?
  • Will shows in 3D be interspersed with 2D commercials?
  • What is the financial justification for the extra expense involved in 3D?

This year's CES promises to be a banner year for trumpeting 3D TV. There will be an Experience 3D TechZone and lots more across the show floor, so we'll watch as this area develops.


The Broadband Forum

Laurie Gonzalez of Broadband Forum --> Click for larger pictureWe met with Laurie Gonzalez, Marketing Director, The Broadband Forum at Telco TV to learn more about the Forum's activities. The mission of the Forum is to "develop multi-service broadband packet networking specifications addressing interoperability, architecture and management."

Our conversation with Laurie focused on their work to avoid duplication of efforts. Laurie explained that the former name "DSL Forum" no longer described their wide scope of activities. Current efforts include liaison with the Home Gateway Initiative for collaboration on the development of standards and specifications for broadband networks worldwide; their working with the Home Grid Forum to develop a certification program for G.Hn; and their union with the IP/MPLS Forum to establish a central body for next generation packet network specifications.

The organization has both technical and marketing initiatives. Laurie's presence at Telco TV was on behalf of the Broadband Forum's Ambassador Working Group, which promotes the Forum's objectives through speaking engagements at industry events.


Orca Interactive: The Guide is King

Once upon a time, a printed weekly magazine called "TV Guide" was the definitive source for information about what content was on what channel at what time. It was summarized in a series of grids, divided by day, time and channel. Most on-screen guides -- both simple scrolling guides and interactive guides -- still follow the old grid model.

Piece by piece, technology has destroyed the underpinnings of that notion of the guide as sufficient to explore the possibilities of what you can view. The DVR and "start over" did away with the notion of a program only being available at a given time. Slingbox undid the notion of "place". VOD, the Internet and the home server did in the notion of "channel".

Haggai Barel, CEO Orca Interactive --> Click for larger pictureWith a plethora of content choices and no more bonds of time, place and channel, providing a great guide is an area that is open for innovation. During a visit at TelcoTV with Haggai Barel, CEO of Orca Interactive, we saw one notion of content discovery that appealed to us. Orca's Compass guide is designed from the start for converged services.

Haggai described Compass as "a content discovery recommendation platform." In a world of so much choice and potential confusion, its purpose is to help you discover what you want to watch. He said the Compass model has a close affinity to that of Amazon, which remembers what you have previously bought and looked at. Like Amazon, it allows you to see other people's opinions and reviews and what people who have bought a certain item have also purchased.

Haggai said that in most people's minds Orca is closely associated with its middleware platform, but Compass can be used along with whatever middleware a service provider is using. Compass is based on Web technology, rather than being client intensive. Their SDK supports both HTML and Flash. It is also operable on multiple set-tops and can be accessed not only on TVs, but also with PCs and mobile phones.

Orca Compass VOD recommendations --> Click for larger pictureTo create its "blended recommendations," Compass assigns different weights to several different recommendation engines, including: most popular, what your friends like (social engine), related videos, operator promotion, your previous viewing patterns and choices, and extensive search functions. The service provider can set the weights to create the blend of various engines. The operator is provided with analytics to decide what the appropriate weights are for their objectives.

Portions of Orca's technology are based on the work of the Israeli next generation personalized video services consortium, called Negev. We liked the intuitive and attractive user interface and the idea that you could find something that truly appealed to YOU with only a few clicks. (There may have been other innovative guides on display, but did not come across them at this show.)


OTT -- Over the Top Video

Amino's new IPTV settop --> Click for larger pictureAmino Communications new IPTV set-top boxes were one of the most interesting items we saw at Telco TV regarding "over the top" (OTT) video. These boxes, powered by Intel's Atom CE4100 media processor, will make it simpler for providers to mix and match video from many sources on the TV screen. Amino said the CE4100 "will enable IPTV STBs to deliver a full open Internet experience." Amino's new box supports HD video, home-theater-quality audio and advanced 3-D graphics.

The market for OTT video continues to attract more entrants. Boxee recently announced a partnership with D-Link to make a settop for browsing Internet videos on TVs. Others include Roku, which can stream Netflix, Amazon and MLB video; game consoles like the Xbox 360 and Sony PlayStation 3; and connected Blu-ray players which can receive Netflix Instant streaming.

( www.att.com ) ( www.nsight.com ) ( www.nokiasiemensnetworks.com ) ( www.synacor.com ) ( www.theplatform.com ) ( www.rogers.com ) ( www.adlabsfilms.com ) ( www.in-three.com ) ( www.lgphilips-lcd.com ) ( www.sony.com ) ( www.sky.com ) ( www.hdlogix.com ) ( www.broadband-forum.org ) ( www.homegatewayinitiative.org ) ( www.homegridforum.org ) ( www.orcainteractive.com ) ( www.negev-initiative.org ) ( www.aminocom.com ) ( www.intel.com ) ( www.boxee.tv ) ( www.d-link.com )


Deja Vu All Over Again

History keeps trying to teach us lessons, but sometimes we are slow to grasp them. Speaking at the UBS Annual Conference last week, Ralph de la Vega, President and CEO, AT&T Mobility and Consumer Markets, said that "a small number of heavy users are hampering network performance" for the rest of its customers. ... About 3 percent of [AT&T's] smart phone customers are driving about 40 percent of the [wireless data] traffic." He wants to convince those heavy users to reduce their usage "voluntarily" or he will start charging them more: "Longer term, there's got to be some sort of pricing scheme that addresses usage"

Where have we heard this before? In 1991, early online services company Prodigy reportedly discovered that "20 percent of the users were sending 90 percent of the email messages, costing the company millions of dollars with a mail flow growing 20 percent a month." Prodigy characterized these heavy users as "abusers" and revised its formerly unlimited flat-rate pricing: for the $12.95 monthly fee, each household now got 30 emails per month and was charged 25 cents for each additional message. The result was probably the first nationwide protest organized largely online. (Prodigy later abandoned flat-rate pricing in favor of three options, ranging from $7.95 to $19.95, combining monthly fees and hourly usage charges.)

Mindful of that lesson, we (Sandy & Dave) spoke about the coming opportunities for high-speed data services at several conferences in 1996. We pointed to Prodigy's experience and suggested that while customers prefer flat-rate pricing, a single flat-rate plan would inevitably lead to "run away" applications with a few users consuming most of the resources. We suggested tiered pricing alternatives to accommodate the needs of both light and heavy users.

But marketeers love the simplicity of flat-rate pricing. Our message went unheeded, and flat-rate pricing became the norm for consumer data services. Over the years, we have followed the attempts of broadband service providers--both cable and telco--to recoup the costs for usage that they view as well beyond the norm. For example, in April, 2009, Time Warner Cable announced tests of "Consumption Based Billing" in several markets. This resulted in an uproar that drew the attention of Congress. Subsequently CEO Glenn Britt put the trials on hold, saying "we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties". The company said it was postponing tiered pricing until it could better educate customers on the new fee structure.

So here we are once again, this time with AT&T and iPhone flat rates. De la Vega told his audience that AT&T will address their problems by first making customers aware of how much wireless data they're consuming and then charging heavy users more if they don't cut back their usage. It sounds a lots like what Time Warner decided--first educate users on how much they are using and then charge the very heavy users if they don't cut back. It will be interesting to see how customers who were sold iPhones under the premise of unlimited data usage react to this revised offer.

So what have we learned from this?

  • Customers love flat rates, and flat-rate services are easy to sell.
  • If you tell people they can use as much as they want of something, it is not "abuse" if they take advantage of what you have offered.
  • Once you have made an offer to customers and they have accepted it, don't be surprised if they're outraged when you try to change it to something less generous.

Why don't we ever learn?

The situation with the cable operators was not so surprising. In their world, it didn't matter if one person or a million were watching a TV program. They didn't think in terms of Erlangs -- indeed, most of them had never heard the word.

But AT&T is steeped in traffic engineering. It's hard to understand how they fell into this trap. They're likely to find that it's hard to get out of it.

( www.att.com ) ( www.timewarnercable.com )


Partners' Connected Health Symposium 2009 -- Moving To the Mainstream

We're very glad we got to the Partners' Connected Health Symposium in late October. Although we've covered connected health since 2003, the last conference we attended was Healthcare Unbound in July 2007. At that time, we were disappointed in the lack of progress on significant implementations. In the two and a half years since, there has been noticeable progress, including within the U.S. healthcare reform agenda.

Past conferences have focused more heavily on some of the changes that must happen to the system in order to improve quality while controlling costs. One example is the need to change the traditional "fee for service" model into value-based payments. Although suppositions about necessary changes were part of this year's agenda, we came away feeling that we are closer to reaching the tipping point in which people will come to take connected health for granted in the same way that email and blogs have become part of our social fabric.

Broadband connectivity is pervasive. Most consumers own mobile devices. Connected health device standards are being set. Certified devices and services are starting to reach the market, with many more coming. Many types of health data platforms are available to healthcare practitioners and consumers.

With the national focus on improving the cost-effectiveness of healthcare, it's clear that connected health will play a major role.


Some Take-Away "Nuggets"

At any conference, there are some quotes that you take away with you. Before we delve into some areas that deserve more focus, here is a brief summary of some of these nuggets.

  • "Most every powerful constituent group favors health reform, but if it is not their plan, they prefer the status quo." Stuart Altman, Professor of National Health Policy, Brandeis University
  • "One of a physician's best tools is not a black bag, but a Blackberry." Congressman Ed Markey
  • "Follow the dollar. The debate has never been about healthcare, but about who pays." James Mongan, CEO Partners HealthCare
  • "What is missing is infrastructure to scale these programs." David Ahern, Clinical Research Psychologist, Brigham & Women's Hospital (speaking about today's telehealth programs)
  • "You'll know when this market has made it when the (connected health) products are in Best Buy." Laurie Orlov, Founder, AginginPlaceTech.com

Enabling Everyone to Participate

Connected Health enables people to become active participants in their health care. It's important for people recovering from a serious illness, suffering from a chronic disease, or just interested in improving wellness. Connected health provides the key tools for both the patient and healthcare practitioners.

These tools start with simple mechanisms such as email exchanges between patients and their doctors, and online access to health records and test results. They progress through home monitoring systems which measure blood pressure, pulse rate, weight and other vital signs, and upload them to a system where health professionals can view them. Ultimately the patient and the professionals become collaborators.

Joe Kvedar's views on stages of connected health --> Click for larger pictureDr. Joseph Kvedar, Director of the Center for Connected Health at Partners Healthcare, expressed this progression in his keynote presentation at the conference. His opening slide titled "Where We’ve Been And Where We’re Going…" shows four stages. We're currently at "Clinician and Patient Collaborate and Share Info" and heading towards "Patient Self-Mgmt...Clinician as Coach...Employer as Enabler".

Tools exist today to enable clinician/patient collaboration. Several companies offer email systems specifically for doctors, and medical practices are signing up for these services. As an example, RelayHealth provides a comprehensive system for medical practices, including email communications and email-based "Web visits", prescription renewal, lab results, online personal health records, and more. (Our primary care physician recently signed up with RelayHealth, and we're now using it ourselves.) Other companies offer similar systems for group practices and hospitals.


Standards and Devices

The most important change in the past three years has been in establishing standards for connected medical devices intended for personal use in the home. When we first started attending these conferences, every device had a proprietary interface, with the entire end-to-end system provided by a single company. Many of these products had price tags of $1000 or more.

Today there are IEEE standards for device communications. Many companies are developing products to meet the standards. Certification mechanisms are in place, and the first certified devices are now on the market. Prices are falling.

Continua Health Alliance and IEEE 11073

The Continua Health Alliance is playing a leading role in driving the standards. Formed in mid-2006, Continua is an open industry group comprised of more than 200 companies involved with connected personal health and fitness products and services. In addition to providing products and services to healthcare providers and consumers, some Continua member companies are actively using them with their own employees.

Continua efforts are focused on three "use cases": Disease Management, Aging Independently, and Health & Wellness. For each, it envisions devices in the home communicating with an "Application Hosting Device" such as a mobile phone or a PC, which can in turn communicate over the Internet to care givers, healthcare professionals, and services.

Communication standards are required for all these use cases. An IEEE group P1073 has been working on protocols for interoperable medical devices for more than 20 years. Its efforts moved into high gear with the formation of the ISO/IEEE 11073 Personal Health Devices Work Group in July of 2006 with active participation from Continua members. The first set of new 11073 standards was published in October 2008, with 24 more under way. These cover many kinds of devices, including thermometers, scales, pulse oximeters, cardiovascular fitness and activity monitors, and an "Independent Living Activity Hub."

The 11073 standards form the core of Continua's "Version One Device Connectivity Standards". The device standards are transport independent; in Version One, they can communicate with the "Application Hosting Device" over USB or Bluetooth.

Continua's Version 1 standards --> Click for larger picture

Continua has established a formal certification process. The first certified device was a Nonin pulse oximeter. Continua has announced five more certified devices, including a blood pressure monitor, scale, and blood glucose meter.

Every major medical device maker is a Promoter Member of Continua. All of these companies prominently displayed the Continua logo in their booths at the Partners conference. Although few of their devices have been certified, it's reasonable to expect many more now that certification is under way.


Connected Health Services

Several companies provide services which accept and store clinical data from medical devices, and provide analysis and information for patients and clinicians. The simplest services run on a PC in the home, with data uploaded from the devices by USB or Bluetooth. An example of these is the Omron Health Management Software which works with Omron's USB-enabled HEM-790IT blood pressure monitor and HJ-720ITC pedometer.

Partners SmartBeat

Partners' Center for Connected Health takes this a step further with its SmartBeat program. SmartBeat couples remote blood pressure monitoring, Internet-based feedback, and personalized coaching for hypertension self-management. After trialing SmartBeat for six months with EMC Corporation between 2007-2008, Partners launched SmartBeat for its own employees in Spring 2009. It is now offering it to large employers in New England.

Personal Health Data Platforms

In addition to platforms like RelayHealth for healthcare providers, and those such as SmartBeat for employers, several personal health data platforms are offered directly to consumers. The leaders of three of these platforms -- WebMD, Microsoft's HealthVault and Google Health -- participated in a panel at the Partners conference. While WebMD is primarily focused on providing health-related information to patients, HealthVault and Google Health are focused on collecting and storing patient data, making it available--with the patient's permission--to caregivers and healthcare professionals.

HealthVault and Google Health both include tools to maintain an online personal health record showing conditions, family history, prescriptions, and the ability to share those with providers. HealthVault includes logging measurements of blood pressure, weight, etc. The measurements can be entered manually through a Web interface.

Even better, HealthVault includes the capability to upload measurements directly from a connected device by installing a PC program called HealthVault Connection Center. Many connected medical devices are already supported by HealthVault; some are also Continua certified.

Success Models

A session on behavioral health provided the opportunity to hear about a success story in using telehealth for mental health in areas such as post traumatic stress and depression treatment. Dr. Linda Godleski who is the lead for Telemental Health at the Veteran's Administration spoke about how they have an extensive program in place for mental health issues of veterans. Their focus is remote access into the clients' residence.

One of the key values of the program is privacy--no one except the client needs to be aware of their use of mental health support. Patients with certain diagnoses such as schizophrenia seem to prefer to be remote from the therapist.

The VA has studies that document that this program really works. The same quality measures are used for teletherapy as for face-to-face. The VA is now looking at effectiveness measures compared with more traditional modes of therapy.

Is Disruption Necessary?

In a keynote speech, Dr. Jason Hwang of Innosight Institute summarized his recent book, The Innovator’s Prescription: A Disruptive Solution for Health Care, co-authored with Clayton Christensen of Harvard Business School. The book applies Christensen's well-known "disruptive technology" model to the healthcare system.

"Disruption is facilitated when historically valuable and expensive expertise becomes commoditized." In the move to "connected health" new technologies like expert databases and videoconferencing are a lever toward that commoditization. The problem is that cramming new technologies into an old business model is futile.

Huang observed that although most service businesses are decentralized, the healthcare delivery system is highly centralized around large general hospitals. He said that the traditional general hospital is not a viable business model and that decentralizing the system would open the way for investment in new business propositions.

We saw some signs of this disruption at the conference. Although Partners Healthcare is the parent of Massachusetts General Hospital and Brigham and Women's Hospital in Boston, its "connected health" initiative is encouraging a movement toward a more decentralized approach, with patients, employees and data platforms all playing a role.

Another sign of disruption was the introduction of a new medical publication, the Journal of Participatory Medicine (JoPM). A free online journal, JoPM says its mission "is to transform the culture of medicine to be more participatory". Its advisory board includes IT visionaries such as Esther Dyson, Kevin Kelly of Wired Magazine, and Howard Rheingold, and its editorial board includes many doctors and healthcare administrators.

The founders or JoPM believe passionately in patient participation, and aim to provide the evidence to demonstrate its value to all parties. They view themselves as disruptors of the traditional "doctor knows best" approach to medicine.

What About Broadband?

What role does residential broadband play in connected health? In principle, data can be moved between the home and healthcare platforms over any type of transport. When we first started attending these conferences, most medical devices communicated over dial-up modems. Now high-speed connectivity is taken for granted as one of the key enabling technologies.

As healthcare delivery systems embrace connected health as a key element in improving healthcare while managing costs, it will be a major opportunity for wireless and wireline service providers.

Led by Qualcomm, the wireless industry has long promoted the use of the cellphone as the primary tool for connecting medical devices to healthcare platforms. Since many medical devices connect with Bluetooth, and most patients have cellphones, wireless carriers and their vendors view it as natural to carry data through the cellphone to the healthcare platform -- without using PCs and fixed-line broadband links. Wireless carriers and vendors were very visible at the conference, promoting their views.

Wireline carriers have started to see the opportunity. Cox Communications -- the third-largest cable television company in the US -- recently said that it would be focusing on healthcare opportunities. Speaking at a recent conference in New York City, Cox Business vice president Phil Meeks said that Cox already generates nearly $1 billion selling its services to commercial customers, and expects that to double within six years. Meeks said Cox sees the healthcare vertical as the largest component of its future commercial services revenue. He said Cox would provide services to hospitals, doctor's offices and consumer homes: “We're creating this ecosystem where we're tying together the hospital, tying it to the doctor’s office, and tying it to the home."

Influencing Consumer Behavior

One of the most fascinating elements of the Connected Health Conference was influences on consumer behavior and its relationship to health. Nicholas Christakis, Professor of Medical Sociology at Harvard Medical School, gave a talk on "The Spread of Health Phenomena in Social Networks". Christakis is the co-author (along with James Fowler) of "Connected: The Surprising Power of our Social Networks and How They Shape Our Lives."

Based on a variety of scientifically conducted tests and mathematical analyses of data regarding social connections and other characteristics, the authors concluded that a key factor in determining our health is the health and behaviors of not only our partners and friends but also the health and behavior of people in our extended social network. This theme was echoed by Dr. Mark Carroll, Director Telehealth Program U.S. Indian Health Service. He said "The social determinants of health are more important than your cholesterol level." If you don't believe this, we suggest you read "Connected".

Two other books that were discussed at the conference bear mentioning here. The first is "Nudge: Improving Decisions About Health, Wealth, and Happiness" by Thaler and Sunstein and "Free Market Madness: Why Human Nature is at Odds with Economics--and Why it Matters" by Peter Ubel. Although these books are not directly about health care, both bear on how personal decisions about health care can be influenced toward harmful or beneficial outcomes. The ideas in "Nudge" are particularly useful for corporations which are trying to reduce their healthcare costs by improving the health of their employees.

We give the sponsors and speakers in this symposium an "A" for depth of content and intellectual stimulation!


For More Information

We have been covering connected health for more than six years. We have visited with companies and attended many conferences (and spoken at a few). Our Topical Index: Connected Health provides access to our articles on connected health standards, devices and platforms.

( www.connected-health.org ) ( www.partners.org ) ( www.relayhealth.com ) ( www.continuaalliance.org ) ( www.nonin.com ) ( omronhealthcare.com ) ( www.va.gov ) ( www.innosightinstitute.org ) ( www.hbs.edu ) ( www.jopm.org ) ( www.coxbusiness.com ) ( hms.harvard.edu ) ( www.intel.com )


Upcoming Conferences

2010 Consumer Electronics Show

Its almost time to start a new year and that means that the Consumer Electronics Show (CES), 2010 version, is right around the corner. It will be held in Las Vegas, NV from January 7-10, 2010. This year 950 technology companies from outside the United States will be among the more than 2,500 exhibitors. We'll be there, looking at what's noteworthy and seeing what is in store for the future in areas ranging from 3D TV to set-top boxes to connected health, smart grid and a host of other topics we have been following. Please say "Hi!" if you see us there. ( www.cesweb.org )


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