Broadband Providers "Not So Fair Use" Violates Net Neutrality

A couple of articles have been published recently describing how broadband providers are managing their traffic to their advantage and to the detriment of specific services. The BBC has published an article describing how BT throttles the bandwidth on its broadband service and degrades the quality of the BBC iPlayer at certain times of the day. The second is a Light Reading article describing the results of femto cell testing by Epitiro that shows that traffic management by broadand providers will negatively affect the performance of femto cells during peak traffic periods.

The BBC has identified a clause in BT's fair use policy that permits it to reduce the bandwidth on its broadband service to below 1 Mbps, which degrades the quality of the BBC iPlayer over the top IPTV service. The article cites an example of a user who has been affected by this policy.

The traffic analysis performed by Epitiro shows that some broadband providers are throttling IPSEC traffic so that it provides worse performance that best efforts Internet traffic at the same time.

These are the kind of situations that those promoting the Net Neutrality agenda are concerned about. In both cases the broadband providers are throttling the traffic of competitors. The BBC iPlayer competes with BT's BT Vision IPTV service. Femto cells will compete with the broadband provider's VoIP and POTS services. The broadband providers are building the case for Net Neutrality when they do this and will produce a regulatory reaction that they will not like at all.

Wireleine Woes

The New York Times published and article discussing if the U.S. wireline telcos will need a bailout to rescue its copper based access business. It pointed out that AT&T lost 12 percent of its access lines in 2008 and Verizon lost 10 percent. The article paints a pictures that the wireline business in the U.S. is headed toward bankruptcy.

I have been tracking U.S. switched access lines at my website from 1991 through 2007. The FCC has stopped tracking switched access lines, so that one of its most interesting pieces of data will no longer be updated.

It is clear that copper is being replaced by the cable companies coax, by wireless technologies, and by the telco's own fiber services. The more aggressively that they deploy fiber, the better off they will be in the long run.

GVT Brazil to Offer 100 Mbps Broadband Service

GVT, the Brazilian CLEC, will launch 50 Mbps and 100 Mbps broadband services in cities where it currently operates. This follows on to its successful 10 Mbps offering, which now accounts for 29 percent of its sales and is available to 9 percent of its ADSL foot print.

GVT is taking a disruptive approach to the Brazilian market by offering significantly higher speeds and the same price or less than the incumbent carriers. It is another example that shows the preference for higher speeds.

FCC to Create U.S. to Create National Broadband Plan

The recent American Recovery and Reinvestment Act of 2009 also known as the stimulus act, charged the Department of Agriculture’s Rural Utilities Service (RUS) and the Department of Commerce’s National Telecommunications and Information Administration (NTIA) with making grants and loans to expand broadband deployment and for other important broadband projects. Congress provided $7.2 billion for this effort but is not insufficient to support nationwide broadband deployment. Consequently, the Recovery Act charges the FCC to create a national broadband plan by February 17, 2010, that will seek to ensure that every American has access to broadband capability and establishes clear benchmarks for meeting that goal.

This kind of comprehensive plan is over due. Europe and countries such as Japan, Korea, and Australia are well ahead of the U.S. in this effort.

The problem is that such a comprehensive view is very a very complex project. It will be difficult to bring focus to such a large effort that will make it effective. It could easily end up so general that it does not provide a useful perspective.

I think that the FCC should focus on creating an open environment that creates a competitive service environment based on fiber to the home and 4G wireless. The current approach that relies on competition between the telco and cable giants impedes competition. ADSL, VDSL, 2G, and 3G wireless are all technologies that are either now obsolete or rapidly approaching their obsolescence. Drawing such clear lines will help the FCC make this effort meaningful.

Australia will Establis New Company to Build Fiber Network

The Australian government has unveiled a plan establish a new company to build and operate a national broadband network that will provide 100 Mbps fiber connections to homes, schools, and businesses in towns of a population of about 1,000 or more, which will provide coverage to 90 percent of the people in Australia. Wireless and satellite technologies capable of providing 12 Mbps will be used in more remote locations. This network will include fiber links between cities, major regional centers, and rural towns.

The services of this network will be provided on wholesale-only, open access network. The initial estimate is that this network will cost $30 billion to build. The government plans an immediate investment of more than $3 billion. The Australian government will seek private investment in the company to draw on private sector capacity and expertise. However, ownership restrictions will be established to protect the Government's objective of a wholesale open-access network.

This is a strong commitment to an advanced broadband network. It provides a unique approach to provide an open fiber network. It illustrates the importance of government policy in building fiber networks.

Korea Plans 1Gbps FTTH Network

An article in the JoongAng Daily states that the Korean government has a $25 billion plan to deploy wireline and wireless broadband services over the next five years. The government will contribute about $1 billion and the rest will come from industry. This project will deploy fiber wireline services of 1 Gbps to each home and wireless services of 10 Mbps.

This project defines the state of the art. I expect that 1 Gbps fiber services will be come the the standard level of service by 2020. Again, Korea is well ahead of the curve.

Femto Cell Survey Article

Light Reading has published a nice survey article about the state of femto cell technology. Femto cells are likely to very important but are just getting off the ground now.

Is Wireless Important to Cable Companies?

A Light Reading article discusses comments by a financial analyst who believes that wireless is not an important element to add to cable bundles. His point is that bundles require discounts, which reduces revenues.

I think he is probably right about adding wireless to cable bundles. Wireless probably will have less effect on consumer decisions than the other elements of these bundles.

However, in the long run as carriers offer wireless and broadband wireline services based on a single, integrated IMS infrastructure to deliver VoIP services there will be tremendous opportunities to integrate wireless and wireline services into a single offering. The cable companies will have to be in a position to offer similar integrated wireless and wireline services to stay in the game.

The moves that the cable companies are making with Clearwire today are a good step to prepare for that day.

ATT's Cuts

Light Reading published and article with various opinions on ATT's announcement that it would cut 12,000 people and reduce its CapEx budget. The gist of it is that ATT will not make cuts in wireless or broadband but will cut its wireline operation. The article ends with a quote from one analyst who believes that cutting spending on its POTS network will be a major mistake for ATT.

What ATT is reportedly doing is consistent with how networks will evolve during the next decade. Wireless and broadband will become more important and POTS services will fade away. Personally, I think ATT is making the correct choices.

White Space: Taking the Internet Back to the Future?

The FCC decision this week to open up the TV "white spaces" to unlicensed wireless services has great potential to break the hammer lock that the cable and Telcos have on the consumer Internet business today.

Ten years or so ago, before the advent of cable modem and DSL services, there where hundreds, if not thousands, of ISPs providing dial up consumer Internet access. There were a few large ones such as Prodigy and AOL along with many, many small providers. It was easy and inexpensive to set up a dial up ISP service. Get a T1 line and attach a dial up mux, and you were in business.

The advent of broadband services brought this to an end. The cable modem and DSL services had the ISP service bundled in with them. This gave the cable companies and the Telcos a strong strategic advantage. AOL continues to exist, but is a shadow of its former self. EarthLink provides Internet services on top of Telco DSL services, but has a very small share of the market. Almost all broadband Internet users subscribe to cable or Telco Broadband services.

The white spaces spectrum is the UHF TV spectrum that is not being used to broadcast TV content. There is generally 100 MHz of vacant spectrum that can be used for white spaces applications in the major metro areas. There is 200 MHz or more of vacant spectrum in more rural locations. This is enough to support several ISPs that want to offer services.

WiMAX and LTE 4G technologies can support wireless broadband data services that will provide a 1 to 5 Mbps. This will compete well with broadband cable and DSL services. These wireless services will share the conveniences of mobile voice service that have made them popular. These white spaces services have the potential to dominate the low end of the broadband data market. People will like their personal nature and their go anywhere convenience.

This will drive the cable companies to DOCSIS 3.o and the Telcos to fiber, which will give us all that still want them much higher performance on our home broadband services. Enabling start ups to compete will be a good thing for all of us consumers.

U.S. FCC Approves White Spaces Unlicensed Spectrum

The FCC adopted rules to allow wireless devices to operate in unused broadcast television spectrum, commonly referred to as television “white spaces”. These rules will allow for the use of unlicensed devices in the unused spectrum to provide broadband data and other services for consumers and businesses.

These rules represent a first step to and include safeguards to protect incumbent services against interference. Devices must include a geolocation capability and provisions to access over the Internet a data base of the incumbent services, such as full power and low power TV stations and cable system headends, in addition to spectrum sensing technology. The data base will tell the white space device what spectrum may be used at that location.

The locations where wireless microphones are used, such as sporting venues and event and production facilities, can be registered in the data base and will be protected in the same way as other services. The Commission also has required that devices include the ability to listen to the airwaves to sense wireless microphones as an additional measure of protection for these devices.

All white space devices are subject to equipment certification by the FCC Laboratory. The FCC will permit certification of devices that do not include the geolocation and data base access capabilities, and instead rely solely on spectrum sensing to avoid causing harmful interference, subject to a much more rigorous approval process.

The FCC will oversee and monitor the introduction of TV white space devices and will promptly remove any equipment found to be causing harmful interference. The FCC will explore whether higher powered unlicensed operations might be permitted in TV white spaces in rural areas.

This ruling potentially has major ramifications. It makes it much easier and much less expensive to set up a wireless service. It is not necessary to win spectrum in an expensive auction. A service provider only needs to purchase appropriate equipment.

There is a large amount of white spaces spectrum that is available. It is possible for multiple service providers to operate without interfering with each other, even in dense metropolitan areas. Spectrum sensing will prevent them from interfering with each other.

It is likely that these services will have a major effect on ADSL services. It is likely that a white spaces wireless data service will be very competitive with a 3 Mbps ADSL service. This will drive the wireline carriers to fiber technologies.

BT Introduces Integrated Wireline/Wireless Data Service

BT introduced broadband packages for small businesses that include mobile broadband as part of a wireline/wireless offering. It provides a service that includes wireline broadband along with BT Openzone Wi-Fi hotspots and mobile networks (GPRS/3G/HSDPA/HSUPA). It now offers three usage plans:

BT Business Total Broadband Options	Broadband Option 1	Broadband Option 2	Broadband Option 3
Price Per Month (on a 24 month term)	£15	£26.99	£40.50
Fixed line Download Limit	10GB	Unlimited†	Unlimited†
BT Business Mobile Broadband	Unlimited† usage available for £17.50 per month	One Mobile Broadband USB stick per contract – 1GB usage 2,000 BT Openzone minutes	One Mobile Broadband USB stick per contract – 1GB usage 2,000 BT Openzone minutes
Wireless Router	£79 or £59 online exc. VAT	Included	Included
Security	Anti Virus and Anti Spam	Anti Virus and Anti Spam	Internet Security Pack for 5 PCs
Support	24/7 UK-based Freefone Support	24/7 UK-based Freefone Support	24/7 UK-based Freefone Support IT Support Manager - allows our IT experts to help fix problems remotely, no need to call out an engineer

This is one of the first examples of what I expect will be a very important trend. I believe that similar integrated services will be offered to consumers and will become an important competitive advantage for Telcos over their cable competitors. However, this approach to offering services will have a significant effect on the organization of the Telcos as well as the structure of the industry itself. I will write more about this later.