We speculated last week what the telco contribution to the concept of the “social graph” would be, noting that “call detail records are information-rich and enable telcos to track (and bill) for small actions at an individual level.” We failed to note that the FCC has stringent guidelines about how such data can be shared — basically, it can’t, without customer permission.

But permission can be a sticky concept.

Recently, Verizon Wireless began sending a letter to subscribers offering them the option to opt-out of having their customer proprietary network information (CPNI) shared with third parties. Not surprisingly, it raised some red flags. A copy of the notice, posted now by Verizon, can be found here (PDF).

Verizon posted its response, saying the CPNI sharing was only between Verizon subsidiaries for the purpose of service delivery — and would not be meted out to third parties or used for advertising purposes.

We want to look into this further before we comment fully. But telcos must walk a careful line. Facebook and Google can talk about “sharing” social graph data and introducing “social ads.” They get touted as innovators, not slammed for violating customer privacy. It’s a boundary clearly being defined on the fly.

We’ve been covering this topic on this blog and are working on a story for an upcoming issue of Telephony.

Would love to get reader feedback on this poll:

This is clearly not an apples to apples comparison, but Amazon.com is apparently having great success moving beyond its core business (e-commerce) into what is often called “cloud computing.”

Mashable has the breakdown on Amazon’s latest earnings report, including these juicy nuggets on areas of new revenue growth:

Amazon’s S3 service now hosts more than 10 billion files, doubling in just the past six months. Meanwhile, an additional 25,000 developers signed up for the company’s web services program in the past quarter, bringing the total to 290,000. Additionally, sales from third-party merchants (aka, affiliates and people selling via Amazon’s web services) made up 32% of total sales. All of these factors point to Amazon diversifying its revenue, as well as in the long-run reducing the amount of money it spends on marketing as more people build applications that link into the company’s huge product database and fulfillment capabilities.

These gains reflect the promise of telecom service providers “opening up” their networks and 1) offering core services (storage, API access to call management and other services) and 2) allowing others to mashup applications that use carrier services among the piece parts.

To me, the interesting question is this: can telcos combine their never-ending, triple/quad-play-based effort focus on increasing ARPU — average revenue per user — with new revenue streams based on open access-driven scale and volume?

In Amazon’s case, open access-driven scale equals 10 billion files and 250,000 developers consuming its APIs.

What are the analogous telephony 2.0 metrics of scale and volume success?

When Facebook launched its API platform earlier this year, the social network platform took off. By giving developers the ability to build their own applications that could be embedded within the social network, Facebook seemed to have found a a bit of gold. With a built-in audience, developers flocked to the platform. Users loved the new apps, especially how nicely they were integrated with the platform. And Facebook pulled in millions of new users and generated oodles of page views, all of which lead to talks with Microsoft, Google, Yahoo and others that have seemingly valued the company at a whopping $15 billion.

This week, MySpace followed suit, announcing at the Web 2.0 Summit in San Francisco plans to open its platform up to third-party developers as well. From blog Read/Write Web, here’s what MySpace has planned:

1) In the coming weeks MySpace is launching a catalogue of all widgets and tools available on MySpace;

2) In “several months” they will make industry standard APIs available through a new platform where developers can try new things in a sandbox environment;

3) MySpace users will have the opportunity to participate in an opt-in beta test program, to determine usability;

4) Users will vote and ultimately determine which of the third party widgets get tightly integrated into MySpace;

5) MySpace will formally introduce the best widgets into the community, with what they term “highly developed integration”.

This is a bit different than Facebook’s “wild-west” third-party-app approach. With an audience used to voting (via “friending”), the MySpace strategy just might offer the right mix of openness and control, a concept with which Apple is wrestling right now in allowing third-party apps on the iPhone.

The “API wars,” however, call into question what “open” *really* means in the context of a social network. Is it just the ability for outsiders to add applications?

No. What is more important to end users and third-party developers — and what is really the social net owners crown jewel — is the “social graph” of connections between all the users on the site. A social graph goes beyond individual customer record or profile information to mapping the connections an individual user has — and not just the first degree, but several degrees deep.

In telephony parlance, if call detail records are an equivalent of a Web site user profile and the cookie tracking what an individual user does, than the social graph takes those records into “3-D” –essentially tracking a user’s extended universe of connections and seeing connections between multiple levels of users.

That, in a nutshell is what makes social networks so powerful.

So what does it mean to “open up” the social graph? It includes:

1) Providing individual users the ability to take their social data with them to other sites and applications

2) It provides third-party sites and developers with access to that data to leverage it in their own applications

3) It ostensibly would allow synching of social graph data between multiple sites, significantly lessening the “entry fatigue” of having to re-enter data at multiple sites

You’ll notice that in its plans to “open up,” MySpace, the world’s biggest social network, doesn’t mention sharing its users graph of social connections. Facebook, which has grown like wildfire this year and has the biggest share of attention in the social network market, has started talking about sharing its social data soon. Facebook CEO Mark Zuckerberg said at Web 2.0: “It’s the users’ data. We want to [make it portable.] That’s the goal.” But he declined to give a time frame. Meanwhile, Google is rumored to be announcing its social network plans in early November. Given its huge advertising lead, and relative trailing effort in the social network area (its Orkut social net is a bust in the U.S., big in some overseas locales) to talk a lot about more open social network environments. Basically, it “wants in” to what Facebook and MySpace already own.

Do telecom service providers own anything equivalent to a social network’s social graph? At first thought, we’d say no, though as hinted at above call detail records are information-rich and enable telcos to track (and bill) for small actions at an individual level.

How service providers deal with the power of the Web social graph is a key competitive question moving forward.

Storage, a crucial element of any networked applications environment, is heading toward commodity status at blinding speed.

Centralized, Web-based storage is available today for free or close to it. Google is upping its free email hosting to 6 GB, but forget that — Yahoo email hosting has no limits at all. In a funny but telling tale, one user of Amazon’s S3 storage service noted that his monthly S3 storage charge was turned down by his credit card company — it wouldn’t accept a “one cent” charge. (True, his storage needs were small — but still).

Local storage capabilities are also climbing (while prices are dropping). You can get 150 GB for about $100 (not to mention a 4 GB SD card for twenty bucks), a pricing trend that is driving more and more local storage into consumer electronics devices ranging from MP3 players, cell phones, game units (Xbox, PS3) and set-top boxes.

A new set-top box called Vudu leverages a 250 GB hard drive to include start-up snippets from 100 movies and a peer-to-peer download network to speed delivery of the rest of the movie over a broadband connection. BitTorrent, the company formed to build a business on top of the BitTorrent P2P protocol, last week inked a deal with Internet TV provider BrightCove last week to take advantage of local storage and P2P distribution.

Service providers need to think long and hard about how they can use local storage from DVR boxes or other consumer equipment to not only speed broadband delivery but optimize other latency-sensitive services.

We teased this issue a bit in our recent news story on new social network VoIP services — VoIP Goes Social — but voice over IP pioneer Tom Evslin goes all philosophical on us to get at the underpinnings of this trend.

In a recent post (The Third Stage of the VoIP Rocket Never Fired), Evslin notes the 10-year anniversary of VoIP, details his three VoIP predictions from the early days (pricing arbitrage, particularly for international rates; voice as one of many data types; and VoIP as new service enabler) and says the first two came true but the third did not. Or at least it hasn’t yet. He points to services like Vonage and today’s IP PBXs and VoIP handsets and notes that while they do a great job of replicating plain old telephone service, they don’t offer anything new.

However, he sees the fulfillment of VoIP’s promise in the integration of voice and the Web, particularly into (but not limited to) emerging social networks and Web-based services:

There is no third stage of VoIP as an incremental improvement on POTS (Plain Old Telephone Service). Instead there is a whole new way to communicate. POTS won’t be improved; it’ll just be replaced. The rearguard action fought by traditional phone companies will eventually result in their over-priced and underperforming voice services being replaced and abandoned since they aren’t being improved (unless those companies can control the Internet – that’s a big unless).

In the new communication world – which is already forming inside social networks – live voice and voice mail are just two on a continuum of choices people have for communicating with each other. Video’s a choice; so is text and email and still pictures. Communication can be live and real-time; it can be slightly async like texting; or seriously async like email. The modes of communication mix freely. Two or more people using different devices communicate at the highest common denominator rather than the lowest.

And there are no more phone numbers, just names and handles (made up names). There’s no more great directory in the sky; there’s the union of the directories of the social networks we use and our personal directories. We’ll know who’s “calling” us as surely as we know whom we’re calling (callerID today tells you where a call is made from, not who is making it).

One final interesting question is the concept of “place.” In the landline world, you call someone’s *place* — their home, their office, etc. With the growth of social-networks-as-a-business, will we have to go to a social network to reach someone? If you know your Internet history, the obvious answer is no. Open and interconnected will win. Closed and artificially constricted will lose. And that includes Facebook and MySpace, which long-term will likely have more in common with AOL than with Google. Or, as Evslin says:

“I’m in the such-and-such network on FaceBook or I’m a fellow online Rotarian” are relevant uses of cybergeography. But friends lists won’t stay restricted to single social networks like FaceBook or MySpace for long.

There’s a lot to chew on here….but the main point is that all of this will happen organically — indeed it already is. Young people don’t beg for a phone line in their room anymore, as the cliche goes; they’ve got their cell phone. And they don’t even use email that much anymore — it’s IM, though that tends to skew younger, typically replaced by SMS and now Facebook walls. Which of course will be replaced by something else again.

None of which will smell, feel or be priced like POTs ever again.

In our current print issue, I explore Web-based VoiP apps and their newest launching pad: social networks such as Facebook.

Read it: Voip Gets Social

Last week’s news was that the latest iPhone firmware update broke nearly every third-party app.

This week’s question is: what exactly is Apple’s next move regarding third-party application development?

Would-be answers (ie, rumors) include: soon, Sidekick-style; post-Leopard-OS release; never, at least competitors hope; and too late.

We’re starting to work on an iPhone application development story, and our biggest fear is that whatever we write will be obsolete by the time it appears in print.

Do you have thoughts on iPhone application development, particularly how it impacts AT&T and other carriers? Drop me a line: rkarpinski AT telephonyonline DOT com

We wrote last week about cloud computing mega-datacenters in the context of Amazon’s Dynamo storage back-end, as well as the idea that telco central offices are nothing if not the exact same thing (at least in theory though definitely not in practice today).

Today, Google and IBM announced plans to build a “cloud factory” to help universities better research next-generation computing architectures. Says the NY Times:

Most of the innovation in cloud computing has been led by corporations, but industry executives and computer scientists say a shortage of skills and talent could limit future growth.

“We in academia and the government labs have not kept up with the times,” said Randal E. Bryant, dean of the computer science school at Carnegie Mellon University. “Universities really need to get on board.”

Makes us nostalgic for the golden days of Bell Labs as a key driver of 20th century primary scientific research.

Click on the picture above for a cool “cloud” — or really, solar — blast from Bell Labs past.

Like everyone else, we’re written in the past about rumors of a Google Phone.

Today, the New York Times breaks some of the most interesting Google Phone news yet: it isn’t a hardware device at all but a suite of Linux-base software and applications that Google is trying to pitch to phone-makers and carriers.

Accompanied by a photo of a “praying” Google CEO Eric Schmidt, the story quotes “industry executives familiar with Google’s plans.” The key developments:

At the core of Google’s phone efforts is an operating system for mobile phones that will be based on open-source Linux software, according to industry executives familiar with the project. In addition, Google is expected to develop mobile versions of its applications that go well beyond the mobile search and map software it offers today. Those applications may include a Web browser to run on cellphones. While Google has built phone prototypes to test its software and show off its technology to manufacturers, the company is not likely to make the phones itself, according to analysts. In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows Mobile from Microsoft and other operating systems, which are built into phones sold by many manufacturers. And unlike Microsoft, Google is not expected to charge phone makers a licensing fee for the software.

Interesting. But screwing over your enemies (Microsoft) is one thing, but potentially strafing the mobile universe in order to take take mobile advertising revenues from your would-be partners isn’t exactly a clear path to a winning outcome.

Would carriers let their current mobile app decks get knocked out of place by the “Gphone” OS? Maybe for a share of the profits — and a big share. Would Google go for that? I imagine they’d have to.

All the talk about Windows Mobile is interesting, because for all of Steve Ballmer’s new-found interest in building an advertising business, we haven’t heard anything of turning Windows Mobile into an ad engine. Maybe another idea for Microsoft to embrace and extend.

So…carriers and device-makers: would you partner with Google to distribute a Gphone app and OS stack, subsidized by advertising? Let us know what you think.