There are two things here: business and technology.
AT&T and Verizon are both using "700MHz" spectrum. However, Verizon is using the upper-700MHz band and AT&T is using the lower 700MHz band. It is possible (clearly) to support multiple frequency bands, but it isn't free. Plus, AT&T is shipping 700/AWS devices. While Verizon has AWS spectrum, their current crop of devices are 700-only. So, it would mean AT&T supporting three bands 700L, 700U, and AWS.
Beyond that, carriers generally don't do roaming where they have service already. AT&T already has data service everywhere Verizon has LTE. It's slower data service, but it's still service. Voice works the same way. A company might have very low signal in an area, but as long as the phone can get any signal, it will prefer its home carrier. If they had the same policy with LTE, it wouldn't help customers. Heck, Sprint users are allowed to roam onto Verizon for data, but are restricted to 1xRTT (2G) when roaming on Verizon (save for legacy Alltel areas). It might be that Verizon's data roaming rates are so high for newer technologies that it would be unreasonable to offer roaming like that.
That's quite an accusation. It's incredibly unlikely that PC Magazine is risking the FTC going after it by publishing something paid for by AT&T without disclosing it. Frankly, that was an unjustified attack to discredit without providing a compelling counter-argument or other evidence.
Moreover, 40Mbps isn't unrealistic on an empty network for an absolute maximum. Average speeds of 22Mbps seem realistic given Verizon's 16Mbps performance and the fact that Verizon probably has a couple million customers on its LTE network. Likewise, Verizon's absolute maximum is 50% more than their average speed. On an empty network, I'd expect more divergence in speed from average to maximum making AT&T's ~85% difference believable. Likewise, if you visit wireless forums, you'll find plenty of Verizon users posting their maximum rates over LTE and seeing similar speeds.
And these tests were being done using Speedtest.net run by Ookla and endorsed by the FCC. While I don't know the specifics of how it works, it is the standard in testing broadband speed. Without evidence that it can be tampered with, I'd listen to the FCC.
The real question is how AT&T and Verizon's networks will hold up as more customers come on board. Last quarter, Verizon sold only 1.2M LTE devices. AT&T has just started selling LTE devices. We might see the speeds of both networks lowered as the number of customers on the networks increases.
Many people dislike AT&T. PC Magazine is testing an unloaded AT&T LTE network and a mostly unloaded Verizon LTE network. These numbers seem very reasonable given those conditions. It doesn't mean that AT&T will remain at these speeds or remain "better" than Verizon (if your purpose is to defend a cherished carrier). It's simply an initial test of an unloaded network that shows promise for the network. Whether that promise will be realized or not we'll have to wait and see.
In Rackspace's defense, this might be more of an issue of lack of community. Sometimes it's hard to get other people involved and excited about an open source project. It's a lot easier for them to go to NASA, Dell, CloudKick and others and get them to attach their name/logo to a participants page than to get real participants. OpenStack isn't something most web people will be interested in. It's infrastructure. Many, many companies need programmers and tools for them. Very few companies out there are saying, "you know, I'd like to build a server farm of 200 machines to give me a petabyte of distributed object storage with replication policies, failover, the works". Most people would rather just farm that out to S3 since, well, very few companies store that much. Like, OpenStack's Object Storage is a lot of work if you're just going to be storing 100GB. There's no way you could do it cheaper than the $15 S3 is going to charge for that storage since you'd need at least two machines.
How many of us could justify spending a lot of time on running our own object store rather than using S3? It makes sense that Rackspace is a lot more interested in it. I'd say that you'd need to be in the several terrabyte range before it makes sense to think about it. Clearly sites like Facebook, Flickr, and imgur want to run their own storage - they store a lot. But how many web firms do? I'm not saying it isn't an awesome project and I was excited when it came out. However, I'd have to be working on a site that stored a lot to justify building my own cloud storage cluster.
For what it's worth, it would be awesome for everyone if this engineer went on to create a Cloud Files and Cloud Storage competitor using Open Stack and worked with Rackspace without any grudge. Sometimes that's how openness happens. However, there tend to be fewer infrastructure vendors than web apps and so an infrastructure project like this can't be expected to garner the same attention as something like Apache or nginx which lots of people will be running rather than mostly a few infrastructure vendors. For most web operations, it doesn't make sense to pay a lot of money to build this infrastructure when you can get it for cheaper from Amazon, Rackspace, and others.
It might not be that Rackspace is being closed. It might just be that there are few operations that want to help develop these tools and most of them already have their own tools. Flickr and Facebook aren't going to drop their storage engine for OpenStack. Amazon isn't going to replace S3's software with OpenStack. SoftLayer does have their own cloud storage solution, but it isn't as widely used so there's a possibility there, if not a large one.
It's great that it's open source and if Rackspace keeps up the development and it's of high-quality it might start getting used by the next Facebook and Flickr style companies that need that type of storage. But it will happen slowly compared to the adoption of nginx, Django, MongoDB, etc.
The one issue with T-Mobile is it uses the fairly nonstandard 1870 MHz frequency
Actually, T-Mobile uses the AWS spectrum (in addition to PCS/1900MHz spectrum) which has the uplink around 1700MHz and the downlink around 2100MHz. AT&T and Verizon both have AWS holdings as well as Cricket, MetroPCS, and others. It's standard spectrum and MetroPCS and Cricket are actively using it for service today. AT&T and Verizon seem to be holding it to use for LTE in the future when increased capacity becomes necessary.
It doesn't break them. Safari doesn't accept cookies from across domains (by default). Safari still sends cookies to iframes across domains.
Even if Safari blocked sending cookies to other domains, it would still be possible for both commenting and the like buttons to work. On a low-tech level, rather than working by Ajax (which is how I assume they work - I haven't actually used them), they would work as a standard link or form to Facebook's site. Once not in the iframe and on Facebook's site, it would realize that you were logged in and rather than asking you for your email and password would record the like or comment. In fact, when you try to press a like button not logged in, a small window pops up asking for your email/pass so that it can log you in and do just that. It's easy to imagine that the window would pop up, offer a little "thank you for your comment" confirmation with a close button.
Facebook could also decide that it wanted to use Flash cookies which would work if Safari blocked sending cookies to other domains. Safari isn't in control of whether Flash is loaded in an iframe and a Flash cookie is requested from another domain. This is part of the reason why it's more significant on the iOS platform. Advertisers do use Flash a lot and that usage can be used to set a Flash cookie that the browser doesn't control and Flash doesn't have a setting to disallow Flash cookies from sites you don't visit.
The big deal is that many people see Yahoo as a company that time has passed by. There was a time when its properties were the tops. Everyone used Yahoo Mail or AOL, Flickr was the tops if you wanted to share photos, Yahoo.com was the home page of so many more and they used Yahoo search. Today, a lot of our community looks at Yahoo and sees a search engine they wouldn't want to use, a bloated homepage more about flash than utility, a Yahoo Mail that doesn't hold a candle to Gmail, etc. EXCEPT: Flickr. Flickr's still pretty good. Facebook has overtaken Flickr, but Flickr still offers more high-res options, decent topical search, a clean interface that's been spared a lot of the nonsense Yahoo is pushing, etc. But it hasn't progressed lately.
If Yahoo is to make a comeback, they need the types that have been in charge of Flickr (or so the community's reasoning goes). Flickr is the one thing we like that Yahoo's doing (well, maybe add Delicious in there too). And yet Yahoo is letting those properties languish and the talent that works on those properties leave. Sure, Google loses talent, but generally speaking I don't find certain Google properties to have an interface that is so markedly terrible compared to other Google properties. Our community looks at Google's ventures and while they might not understand social, we see that there's a decent consistency of engineering. However, we do look at Yahoo's different properties and many feel like they came from a different company - partly because Yahoo bought their way into Delicious, Flickr, and Upcoming (yea, I added another that I've almost never used).
Imagine that Google had bought YouTube and YouTube's interface and engineering was just so markedly better (to you) than the rest of Google's properties. Then the employees who created this, in your view, superior product started leaving constantly. You'd think: c'mon Google, you bought yourself into the good stuff and we want to those engineers bring that good stuff to the rest of your line, not leave with their products languishing!
People move around, but I think many of us feel that Yahoo has markedly varying quality depending on the division of the company. It might not have any actual significance and engineers might not be leaving those divisions more often than other divisions, but it does have an emotional significance for our community. Many thought that Flickr heralded a new Yahoo. It makes it feel like Yahoo doesn't get where it's gone wrong (in our ultra-hip, we know what's best not some CEO the investors have hired, why isn't the world listening to me as I type away at my keyboard on the internets way).
/Apologies for speaking for everyone; it's more just a theory.
You're right. Coins are cheaper than bills, but $183M per year isn't going to balance the budget. Basically, keeping the $1 in bill form is costing 60 cents per American per year.
The signature database is where they'll get more money from. However, this is still bad for them. It gives people the chance to look through the code for vulnerabilities and it allows competitors to look at any techniques they're using. But the worst part is that they're a computer security company that couldn't keep their source code secure. Clearly, accidents happen even when one has the best policies and such in place. Sometimes it's merely chance as opposed to an indicator of something in a statistically valid way. However, it's still embarrassing. I don't find that there's a lot of testing of the efficacy of anti-virus software out there and so purchases are partially made on faith (would love to know if I'm wrong here since I'd be interested in the results). Anyway, as a purchase made partially on instinct, this makes purchasers feel less happy in their gut (so to speak).
There is some testing being done on them but it's really only the known viruses that are tested against. It's the viruses that are unknown that are what you want to worry about.
I guess I don't see how BankSimple can be truly better. First, there are already no-branch banks like ING-Direct. Second, Credit Unions exist.
BankSimple seems to be a no-branch bank like ING-Direct. They're presenting themselves as being better. How are they different? Well, they're pushing the idea of no-fees, better customer service, and better mobile banking. In order to achieve that, they'll have to be more efficient or accept a lower profit margin. Banks have healthy margins so there is some room there, but there are other industries with higher margins.
The second piece is that there are already not-for-profit banks. They're called Credit Unions. They exist to give their customers (who are their owners) the best deal they can. In order to be better than credit unions, they'll have to be significantly more efficient rather than simply relying on lower margins.
Part of what makes me skeptical is that they aren't creating a bank. They're partnering with currently chartered banks. This is probably because it's very difficult to create a bank and there's a lot of regulation to deal with. However, this somewhat limits what they can do to give me a better deal than a bank (since they're just reselling the product of another bank). Now, banks vary in how good of a deal they give you so part of their product might simply be getting you a good account under their brand. But part of this means that BankSimple won't be doing what banks normally do with deposits. Banks normally lend it out or invest it. BankSimple will be parking it in another account. So, if they aren't charging fees, how will they make their money? Maybe they've found an account that will give them 1% interest and they'll pass on 0.5% interest to me. However, why shouldn't I just bypass them? If they're doing things like refunding ATM fees, covering overdraft fees, etc. will the interest difference cover that?
I'm not saying that it can't be done. They stress no-fees and earning more interest. If they aren't lending the money out themselves, that will be hard to do - especially considering that they're claiming the best customer service, best software, etc. Where are they making their money? Not off fees and they aren't lending it out, but rather relying on other banks.
I'd really love to see their business plan since I assume they've addressed these things. Maybe wholesale banking exists and offers them a lot more. Maybe credit unions are woefully inefficient. I'm excited for their launch, but I'm not unhappy with my credit union.
Millions of people love using Mint.com, and they had a huge exit and it didn't even have any of the bank-ish features that BankSimple is offering. BankSimple revenue model could easily include the same types of things as Mint: Credit Card Offerings, Life Insurance plans, even car insurance. And, they even earn additional, perhaps lower margin, revenue from their banking features. Think of the banking money as the long term huge opportunity to disrupt banks, and the Mint type offering as the short term profit that will allow them to grow.
For the consumer, if they can offer some of the analytic capabilities of Mint combined with the ability to make cash withdrawals from ATMs, deposit checks from your phone, and even get (some) interest it's an incredible product. It can roll most of your online financial needs into one company with a dedication to customer service. Sure, they may provide slightly worse interest rate. But how many people actually know their exact interest rate right now? Compare that with the number that have been adversely affected by overdraft fees and who would appreciate real customer service.
I wish them the best of luck! I hope they become the Zappo's of banking
Yes, I've never seen them admit to it, but I think lead gen has to be part of their business plan. Mint predicted (and got) about $30/user per year from lead gen. If banksimple can be the trusted first place people go to for financial advice and products (mortgage, retirement planning, etc), they should have no problem getting extra revenue on top of the usual bank checking and savings revenue that goes to their partner.
I think the plan is decoupling "retail banking UX" from the multibillion dollar investment you'd need to implement a retail bank nationally in the US, and then testing whether innovation on UX alone provides value over the generic bank experience.
Personally, my experience suggests that many people care very little about receiving monetarily the best deal (and the exceptions make sucky customers).
My bank in Australia, Commonwealth Bank, recently refurbished my local branch as a "flagship" branch, lots of TV advertising about how awesome the new experience is, etc. I thought nothing of it until the other day when I had to go to the bank. When I went in, someone greeted me about 5 seconds after I walked through the door, asked what I wanted, took me to the right counter and explained what I wanted to the person behind the counter (there was no queue - but that might have been good luck). I was completely blown away by the service. At the moment I don't think any deal from any bank would tempt me to switch.
So yes, I think UX innovation could add a lot of value to the generic bank experience.
I would like to point out that ING Direct already has no fees, absolutely fantastic customer service, and a mobile banking app (iPhone, not sure about Android) for their checking/savings accounts as well as one for their ShareBuilder product (investing).
The way that BankSimple could differentiate themselves is by providing a very good API that I can use to get my account information, including transactions easily and securely as well as move money around to various other bank accounts. That is what I miss right now, I can set up recurring transfers but there is no way for me to programmatically say check if there is enough money or a direct deposit has been made correctly before transferring the money.
Maybe I'm alone in that, maybe I am not. Either way they have to offer something that ING Direct currently does not offer at a very competitive price (free) or it just won't be worth my time.
Credit Unions have restrictions on who can become a member. Also, I used to be a member of a Credit Union bank through work and while their fees might have been lower, their web ui wasn't any better than, say, Wells Fargo's.
I also have ING Direct account because they have much better savings rates then Wells Fargo. However, again, their web ui leaves a lot to be desired.
If not anything else, currently a bank-like service can differentiate itself simply via a fast web site with a top-notch design. From the UI previews I've seen so far, BankSimple is doing the web UI much better than the banks I'm familiar with.
banksimple negotiated high rates in exchange for banksimple doing all of the overhead/grunt work. the partner bank ensures the money and will lend it out, just like a normal bank. banksimple is basically building a slick customer service and user interface business on top of an existing bank, not building a new bank.
they make money on the difference in what they're paying in interest and what they're getting, and kickback on the card usage.
I get the impression from their website that they're basically making INGDirect.com + Mint.com, design for mobile from the start, and instead of a single bank, aggregate a bunch of them. There's probably some special sauce too they haven't elaborated on yet.
Interesting combination, hope it works, and that their business model has solutions to the obstacles you mentioned, especially the fee/cash flow stuff
ATT isn't saying that your iPhone is 4G. Your iPhone supports HSPA 7.2. ATT's network is HSPA+ but they don't have any HSPA+ phones yet. HSPA+ is what ATT and T-mobile are calling 4G.
AT&T and Verizon are both using "700MHz" spectrum. However, Verizon is using the upper-700MHz band and AT&T is using the lower 700MHz band. It is possible (clearly) to support multiple frequency bands, but it isn't free. Plus, AT&T is shipping 700/AWS devices. While Verizon has AWS spectrum, their current crop of devices are 700-only. So, it would mean AT&T supporting three bands 700L, 700U, and AWS.
Beyond that, carriers generally don't do roaming where they have service already. AT&T already has data service everywhere Verizon has LTE. It's slower data service, but it's still service. Voice works the same way. A company might have very low signal in an area, but as long as the phone can get any signal, it will prefer its home carrier. If they had the same policy with LTE, it wouldn't help customers. Heck, Sprint users are allowed to roam onto Verizon for data, but are restricted to 1xRTT (2G) when roaming on Verizon (save for legacy Alltel areas). It might be that Verizon's data roaming rates are so high for newer technologies that it would be unreasonable to offer roaming like that.