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Femtocells: Subject to Net Neutrality Regulations?

18 Jan

Public Knowledge says AT&T’s femtocell terms of service violates the FCC’s net neutrality provisions because the data from AT&T wireless microcells will NOT count against the data caps on AT&T DSL or U-verse home broadband connections.

The argument is similar to the one made against Comcast last year when they removed their wireless Xfinity video service from its data caps, while competing services did rack up monthly data usage, putting those competitors at a disadvantage and violating net neutrality provisions.

AT&T has decided that the data from AT&T wireless microcells will not count against the data caps on AT&T DSL or U-verse home broadband connections, says Public Knowledge.  This sets AT&T microcell data apart from every other type of data on those connections, including data from a Verizon or Sprint microcell.

According to Public Knowledge:

The message to AT&T DSL and U-verse consumers is clear: if your cell signal is weak and you are worried about your data cap, better get a phone from AT&T wireless.  Simply put, this is an abuse of data caps. ISPs should not be able to use data caps anticompetitively.  The company that connects you to the internet should not be able to abuse its control of that connection in order to make its unrelated services more attractive.

According to AT&T:

Residential AT&T High Speed Internet service includes 150 gigabytes (GB) of data each billing period, and residential AT&T U-verse High Speed Internet service includes 250 Gigabytes (GB) of data each billing period. The data you send and receive each month contributes to your monthly data plan. Wireless traffic from your AT&T 3G MicroCell does not count toward your monthly home broadband plan.

AT&T plans to install 40,000 Small Cells in the next few years. Many of the 40K “small cells” may largely consist of WiFi nodes using Hotspot 2.0 for seamless roaming.  Hotspot 2.0 utilizes unlicensed WiFi hotspots for use by carriers, enabling seamless roaming by subscribers from cellular service to WiFi networks.


Europe Hurting Telecom Industry: Alcatel-Lucent CEO

28 Dec

Alcatel-Lucent CEO Ben Verwaayen says regulation is holding back innovation in the European telecommunication industry, while the U.S. is advancing rapidly.

European regulations are stifling innovation within the telecom industry and preventing its growth, Ben Verwaayen, CEO of Paris-based telecom equipment maker Alcatel-Lucent has told CNBC.

“It’s not just a French problem it’s a European problem. If you look to why it is that the U.S. is so much [more] ahead than Europe it’s because of the business environment and what you’re allowed to do because this is a regulated business. The situation in Europe is very unfortunate,” Verwaayen said in an interview telecast on Thursday.

He added that the 28 regulators in Europe had created rules focused on lowering prices for customers, whereas in the U.S. regulators had also focused on spurring innovation and new investments. “You don’t have the incentive to take risks and take the investments [in Europe],” Verwaayen said.

Verwayeen warned that the full effect of an overbearing regulatory system in Europe would eventually drive out innovation and limit the possibilities for growth within the industry.

“The realities are that if you have to invest as an operator your investment incentives in the U.S. and Latin America are very different — that is not blame, that is a fact. If the objective is only low prices for consumers, but then don’t expect that we’ll be at the forefront [of innovation], don’t expect that a lot of activities will start here in Europe,” he said.

Alcatel-Lucent shares have fallen 14 percent this year and the company has reported two successive quarters of losses, even as it has been weighed down by debt. (Read More: Alcatel CEO Promises Cost Cuts as Loss Widens)

Last month, Verwaayen indicated further cost cuts and said “the market had been awful for everybody.”

Verwaayen told CNBC the company was “determined to execute” a restructuring plan, which includes 5,500 jobs worldwide despite a backlash from French labor unions and the French government.

In the latest interview, Verwaayen said a number of factors would need to change to enable Europe to get up to speed with the U.S. and other regions in terms of telecom technology.

These included cross-border mergers to consolidate the industry, stimulus for smaller companies and greater competition.

“We need to bring competition to where it really matters and that’s in choice and at the moment the regulator decides my choice and I don’t think that’s great,” he said.

Verwayeen was less than optimistic of a turn-around in the telecom equipment market in the short term, warning that business in Europe would remain weak in 2013.

He added that Europe lacked an ability to harness competition and talent and this was leaving it in the slow lane.

“I’m afraid Europe is ultra-conservative and ultra-defensive. With employment we try to protect what’s here instead of creating [it],” he said.


Welcome to Canada – the home of over-priced telecommunications!

6 Dec

RouterBoard 112 with U.FL-RSMA pigtail and R52...

Behind the times and stingy with it

Canada is among the most expensive countries in the world to surf the net thanks to a government sanctioned regulatory committee that allowed carriers to price-fix the entire market through Usage Based Billing (UBB). In countries where carriers offer packages with no bandwidth limitations, the cost is driven down but lack of diversity and competition in the telecommunications marketplace here means they are unable to offer competitive levels of service and pricing compared to other countries.

Whenever our communications outlay needs re-evaluating it’s a reminder of the teeth-grindingly bitter fact that here you pay huge amounts for a very limited service – and no-one likes facing up to that kind of reality. In the UK we had unlimited usage with an average speed of 56 megabits per second (mbps) as part of our phone package. The whole lot (unlimited high-speed internet, free local calls and free evening and weekend national calls) cost twenty-five pounds ($40) a month. Here, average speeds range from 3.5 – 40 mbps on a mobile connection or up to 25 mbps through a router, and that not only sets you back $60 per month but is capped at 125GB and covers the internet alone, no phone included. Don’t even get me started on the phone… did you know you pay to accept a call here?

It’s complicated…

Our situation is complicated. We have another six months at this address, but after that, nothing’s certain. So we figured mobile was the way to go – no wires or cables and no contract – just month-to-month payments. We had three options: a stick, a hotspot or a hub. A stick plugs into the USB port of your device so only one person at a time can access the web, a hotspot allows for up to ten devices to connect remotely and a hub, fifteen.  We were torn between a hotspot and a hub. As our sole means of connection, it had to be able to cope with the full-time needs of a family and business – streaming movies, admin, Skype, etc. and it had to be durable. Electrical goods in Canada are often only covered by a 12month manufacturers warranty (though extended warranty is available to buy in most cases) after which time the service provider may not be obligated to repair or replace them, even if you’re still under contract.

Speed versus usage

Hotspots and some hubs facilitate Canada’s LTE network. The next step up from 4G, it’s now the fastest wireless network technology on the planet. Used to those nippy UK speeds we thought this was the way to go and found a package that promised 10GB per month for $52 at average speeds of 12 – 40 mbps.  Sigh It was the best we could find. The only question was “would 10GB per month be enough?”

A little research revealed streaming a film uses between 750MB and 2GB depending on quality (high-definition films require more pixels to be transmitted = more data = using up MB at an astronomical rate). We don’t have cable and can’t access free to air channels, so we stream the vast majority of our entertainment. In the end, the choice came down to speed versus usage amount. Rather than enjoy a heavily rationed super-fast service, we figured a similarly priced standard cable package at lower speeds but without the “clock-watching” was better. We’d just have to work out the change of address shenanigans nearer the time.

When it comes to telecommunications in Canada, there’s one certainty: they’ll make you pay, one way or another.


“Sender-pays” rule doesn’t necessarily increase telecom investment

5 Dec

Study casts doubt on ITU proposal; says regulatory reforms, not cash, spark growth.


We recently made the case against a proposal to institute a “sender-pays” rule for Internet interconnection. The idea was submitted by European telecom incumbents and it’s under discussion at this week’s International Telecommunications Union confab in Dubai. Telecom incumbents love this because it could force Google, Netflix, and other major Internet services to pony up more cash. They argue they need these revenues to fund network upgrades and keep the Internet working smoothly.

new study from the Mercatus Center at George Mason University, a libertarian think tank, casts doubt on this argument. There has never been a sender-pays Internet, so we can’t be sure what it would look like. But the international telephone network does operate on a sender-pays model. And Mercatus economist Eli Dourado realized this system could provide insights about how the same billing scheme might work online.

To do this, he collected statistics about international calling rates from the United States, as well as statistics measuring the growth of various nations’ telecommunication sectors. If the advocates of sender-pays were right, we might expect countries with high long-distance calling rates to experience faster development of their communications networks than countries with low rates.

Surprisingly, Dourado found just the opposite:

Dourado charted international billing rates against four statistics that measure the development of telecommunications networks: fixed telephone lines per 100 people, mobile subscribers per 100 people, Internet users per 100 people, and broadband subscribers per 100 people. Dourado found little correlation between long distance rates and fixed telephone line construction. For the other three variables, he found a negative correlation. The higher a nation’s long-distance rates were, the slower the pace of progress in its telecommunications sector.

Of course, correlation is not causation. The observed correlation could be based on other factors, such as a country’s average income or its region of the world. But Dourado found that even after controlling for these factors, there was an inverse correlation between long-distance billing rates and telecommunications development. In short, when you give a telecommunications firm more money, there’s no guarantee it will invest the cash in improving its network.

The paper also considers the possibility that causation could run in the opposite direction: maybe network upgrades make lower rates possible. To check this possibility, he re-ran his regressions on a year-to-year basis, incorporating a lag to reflect the fact that one year’s higher rates could lead to higher investment in subsequent years. “If high rates today are used to fund expansion in the future, then lagged values of the rate coefficient should be positive—that is, high rates today should correlate with high growth a few years from now,” Dourado wrote.

Yet even after making these adjustments, the correlations were still negative. The more expensive it was to make long distance calls to a nation, the more slowly its telecommunications sector developed.

“My results contradict the hypothesis that the ability to charge more for international Internet traffic is all that is needed to build out telecommunications infrastructure in poor countries,” Dourado concludes. “High international telephone collection rates have not led to greater buildout and adoption of telecommunications infrastructure in the past two decades. It seems unlikely, therefore, that adopting a sender-pays model for Internet traffic would increase buildout of Internet infrastructure today.”

Rather, Dourado suggests the quality of a nation’s telecommunications network is dependent on the quality of its domestic institutions. Some countries have telecommunications industries that efficiently put new revenues to work on network improvements. Other countries have corrupt or incompetent telecommunications incumbents that will upgrade their networks slowly no matter how much money they’re given. He argues that regulatory reforms, not more cash, are needed to improve global network quality.


Operators, vendors report largely disappointing results

31 Jul


Latin American heavyweight América Móvil reported a 45% year-on-year fall in net profit to 13.3 billion pesos (US$1 billion), despite a 9.3% increase in revenues to 191.7 billion pesos. The decline was partly down to the weakness of local currencies, which also drove up the cost of handset subsidies. América Móvil says that with more customers opting for smartphones it is seeing pressure on its margins.

Clearwire, the US mobile broadband operator, has reported a second-quarter loss of $145.8 million, compared with a loss of $168.7 million a year earlier. Revenues over the same period fell by 1.8% to $316.9 million, due largely to an 11% drop in wholesale revenues. The company is reported to be considering a sale of spectrum in order to boost its cash position.

Belgian incumbent telecoms operator Belgacom saw a 19% year-on-year drop in second-quarter profit to €161 million ($197 million), while revenues remained flat at approximately €1.61 billion. Belgacom blamed a one-off accounting adjustment of €34 million, relating to new mobile legislation, for the bottom-line setback. It insists it remains on course to hit full-year targets.

NTT DoCoMo, Japan’s largest integrated telecoms operator, saw profits for the quarter ending in June rise by 3.5%, year on year, to 164.3 billion yen ($2.1 billion), as revenues crept up to 1.07 trillion yen from 1.05 trillion yen. The operator appears to be enjoying the fruits of increased smartphone adoption and growing data usage.


Franco-American Alcatel-Lucent announced plans to cut 5,000 jobs and narrow its focus after reporting a disappointing set of second-quarter results. The equipment maker’s net loss came in at €254 million, compared with a profit of €43 million a year earlier, while revenues fell from €3.82 billion to €3.55 billion. Vendors are struggling in the difficult economic climate as operators delay network upgrades and switch to newer technologies that are less profitable for suppliers.

Huawei, China’s biggest maker of telecoms equipment, blamed a 22% year-on-year slide in operating profit on the sluggish economy, as customers continue to reduce their investments. Huawei reported a disappointing first-half profit of 8.79 billion yuan ($1.38 billion), although revenues were up 5.1% to 102.7 billion yuan. The company has made its name as a low-cost provider of networking equipment but more recently has been diversifying into the handset market in response to the challenging conditions.

Juniper Networks, which specializes in the manufacture of internet switches and routers, reported a 50% year-on-year drop in second-quarter net income to $57.7 million. The company said that Asian and European customers had slashed their spending over the past year. Its second-quarter revenues fell by 4.2%, compared with the same period last year, to $1.07 billion.

Source: Jul. 30, 2012

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