Mobile Offload Might be a Top-3 Value Provided by Fixed Broadband Networks

By some estimates, as much as 60 percent of all mobile broadband traffic consumed by users of smart phones will be offloaded to the fixed network, by about 2017,

By that point, only 40 percent of the 90,000 Petabytes of data generated by smart phones, feature phones and tablets  will reach the cellular network by 2017, as majority of the data traffic will use a Wi-Fi network, according to a study by Juniper Research.

That statistic could lead one to conclude that a vital role for fixed networks of the future is  mobile offload, since, if Juniper Research is correct, the overwhelming majority of mobile device traffic will move over a fixed access network, with a Wi-Fi “tail circuit.”

One might conclude that video entertainment also will be among the top-three reasons for buying high speed access. Video entertainment likewise will be one key reason for people to buy high speed access, even if they do not use PCs or the Internet. 

They might not use PCs or the Internet, but they do watch TV. In fact, it long has been true that the long term way to drive high speed access penetration to nearly 100 percent is to shift TV distribution to the Internet.

That explains why Fon, the global Wi-Fi network, will be working with Deutsche Telekom, the leading German telco, to build Germany's largest Wi-Fi network, which will launch in the summer of 2013.

“WLAN to go”  will create what is said to be the largest public Wi-Fi network in Germany. Separately, U.S. cable operators are working to bulld a seamless national network of cable-affiliated hotspots, while Verizon and AT&T both offer nationwide hotspot services as well.

KPN also has partnered with Fon in the  Netherlands. As part of that deal, KPN customers will share a portion of their own home bandwidth in exchange for free access on shared broadband connections of other KPN broadband customers in the Netherlands and Fon customers in other countries.

Belgacom , Belgium’s largest telecommunications company, has a similar deal with Fon. In addition to WiFi access in Belgium, Belgacom internet customers will get global access to the hotspots of Fon’s global WiFi network.

Oi, the Brazilian service provider, is working with Fon on a project in Rio de Janeiro.

The point is that TV delivered over the Internet will provide a reason for people to buy high speed access, even when they don't use PCs or the Internet, as such. On the other hand, one already can note that many people who "don't use the Internet or PCs" actually rely on smart phones.

Add smart phone connectivity to TV and high speed Internet access obviously becomes the foundation service for all fixed networks.

Are Tablets "TVs?" Sweden Says "Yes."

In most countries, voice communications, Internet communications, broadcast media, cable TV and broadcasting have been governed by distinct sets of regulations. That made more sense in an era when each type of service was provided by a distinct and purpose-built network.

These days, as all media types can be delivered by all or most networks, there will be a bigger discontinuity between the older forms of regulation and the ways services are created and delivered, across networks.

Sweden's new policy of taxing use of PCs and tablets to watch the state-owned TV service, and a German decision on copyright fees, neatly illustrate some of the regulatory challenges that accompany changing communications and entertainment ecosystems.

Traditionally, Swedish households owning televisions have paid a monthly tax of SEK173 ($27) per month to support Sveriges Television, Sveriges Radio and educational broadcasting known as Utbildningsradion.

But Sweden's Radiotjänst collection agency now is collecting the fee even from Internet-connected computers. The logic is that, in some cases, PCs are used as “TV devices.”

German lower house of parliament separately approved a copyright bill that protects Internet search firms from payment of  fees to newspapers and other print publishers when snippets of stories are included in search engine results.

The bill's original draft would have allowed newspapers and other print publishers to stop search companies from showing text snippets, unless they paid licensing fees. The bill still has to win approval in the upper house, which is expected to oppose the current version of the legislation.

The other angle is that the bill does not fully settle the issue of whether search engine applications might have to pay publishers if news aggregators publish bigger amounts of content.

The move by Radiotjänst effectively makes a key form of broadcasting regulation applicable to PCs, notebooks and tablets, in a real sense, even when owners of tablets or PCs  do not watch TV. The tax is applied to a households that own Internet connected PCs, but not TVs, whether or not people in the household actually watch television or not.

Smart phones have been exempted from the law, at least for the moment, on grounds that the primary function of a smart phone is communications, not “watching TV.” Obviously, that distinction will be virtually impossible to maintain over the long term. But there is an existing principle that the “TV tax” applies to a “household,” not devices.

Presumably, that means Swedish households without TVs, but using Internet-connected PCs or tablets, will pay the fee only once, and will not have to pay for smart phone use, in addition to tablet or PC access.

Households that do not own PCs or tablets (possibly only a small fraction of all households), and do use smart phones, might ultimately be forced to pay the fee as well. The point is not whether it is “fair” or “right” for Sweden, the United Kingdom or Denmark to tax owners of TVs.

The point is that rapid changes in user behavior and device capabilities are changing the actual environment within which regulatory policy is conducted. Any nation that has distinct regulatory regimes for broadcasting, communications, Internet and print media will increasingly have to confront the growing contradictions and irrationality of older forms of regulation.

Order of Magnitude More Bandwidth Needed as Soon as 7 Years From Today

A scramble by mobile service providers to acquire more spectrum is rational, even if some think attempts to maintain artificial scarcity is the real reason for talk of spectrum scarcity. But some think mobile bandwidth demand is going to explode.

Where today 3 Mbps to 16 Mbps would be a normal range of speed for a U.S. consumer user, by 2020, it is quite possible that half of consumers will be buying and using services offering 100 Mbps, as crazy as that might seem. Video is the reason.

Ooyala says the hours spent watching streaming video on tablets and mobile increased 100 percent in 2012.

That mobile viewing of video grew that much should not come as a surprise. For example, a new study sponsored by inMobi found that 50 percent of the average global mobile web users now use mobile as either their primary or exclusive means of using the Internet.

If people are using mobiles as a primary or exclusive way of using the Internet, and if video is one of the most common Internet media types, it is not too surprising that mobile video viewership would be growing, especially as fourth generation networks and bigger screens now make mobile video a more enjoyable experience.

In 2008, Cisco forecast that video would represent half of global bandwidth will be used for consumer video apps of one sort or another by 2012. Those forecasts were not far from the mark.

Video streaming traffic represented 42 percent share of all global bandwidth in the second half of  2011, up from 35 percent in the first half of 2011, Allot Communications.

Overall, global mobile broadband traffic grew by 83 percent in the second half of the year, with a compound annual growth rate (CAGR) of 234 percent during the year.

This bandwidth is being dominated by a small percentage of users, though: Arieso has estimated that one percent of mobile subscribers now consume half of all downloaded data, with a third of those subscribers using a smart phone.

In the second half of 2011, YouTube accounted for 57 percent of all global video streaming traffic, meaning that YouTube alone held 24 percent share of global bandwidth. Overall, YouTube traffic grew by 143%, while video streaming traffic rose 88 percent.

Ooyala also says live video is starting to drive viewing not pre-recorded video. Ooyala's data also shows viewers watch live video longer on all devices, suggesting live video is more engaging.

On desktops, viewers watched live video 18 times longer than video on demand content in the fourth quarter of 2012, for example.

About a third of the total time spent watching tablet video in the fourth quarter of 2012 was engagement with  premium, long-form content running more than 60 minutes, Ooyala says.

The percentage of time spent watching  long-form video (over 10 minutes) on tablets

increased 37 percent from the first quarter to the fourth quarter of 2012.

The share of tablet video viewing more than doubled in 2012 as well.

Consumers have demonstrated a clear preference for engaging with content on smart phones using apps, which account for about 80 percent of U.S. mobile time spent interacting with mobile apps, rather than the mobile web, according to comScore.

Mobile channels now account for about 37 percent of all digital media consumption “minutes of use.” PCs might still account for about 63 percent of media consumption, but the mobile share is growing.

Faster mobile access speeds seem to be having a clear impact as well. Typically, users consume more total data on faster connections, compared to slower networks. By the end of 2012, 97.7 percent of U.S. smart phone owners used 3G or 4G enabled devices.

While 3G users still represent the wide majority of the  smart phone market, the number of 4G users grew in 2012 to  33.1 million, up 273 percent from 2011 levels of adoption. 

But 42 percent of all smart phone content consumption happens on a Wi-Fi connection, not the mobile network, comScore also reports.

But the main point is that all current notions of how much bandwidth, and how big a data cap needs to be provided, will be broken, and soon, by video consumption habits and preferences.

So-Net Launches 2-Gbps Broadband Access Service

Tokyo and six prefectures in the Kanto area (Kanagawa, Chiba, Saitama, Gunma, Tochigi, Ibaraki) are getting 2 Gbps high speed Internet access, with 1 Gbps upstream. "Nuro" was launched April 15, 2013 by the Sony-backed ISP. 

Provo, Utah is Google Fiber City Number 3

Google Fiber is coming to Provo, Utah, where Google Fiber will get a headstart by buying  iProvo, an existing fiberoptic network owned by the city.

The deal has to be approved by the City Council on April 23, 2013. It would be accurate to describe the network as "troubled," at least historically.  The network was sold to Broadweave Networks.

Broadweave then merged with Veracity Networks, which defaulted on its agreement with the city. In 2012 Provo took control again, and has been looking for a buyer ever since. 

Competing Internet service providers will feel more heat now that Google Fiber operates gigabit networks in three cities. That might not mean that major ISPs start upgrading to 1 Gbps everywhere. 

As typically is the case, major ISPs will upgrade where they have to, because of competitive conditions. So unless Google wants to build everywhere, and most seriously doubt that, gigabit networks will take some time to arrive. 

But gigabit networks seem likely to become the new benchmark. That alone will put increasing pressure on ISPs to upgrade.

Technology Futures, a firm with an extraordinary record of broadband predictions, now argues it is reasonable to expect that half of U.S. broadband access users will be buying 100 Mbps connections by about 2020.

Technology Futures also predicts that about 10 percent of customers will be buying 50 Mbps connections, while 24 percent will still be buying 24 Mbps service.

That might seem a crazy amount of bandwidth for “many typical users,” but standard technology forecasting techniques have, for more than a decade, actually suggested that would happen.

In 2001, for example, Technology Futures predicted that by year-end 2004, over 25 percent of U.S. households will have adopted broadband services, up from about five percent at the end of 2000. The actual U.S. broadband penetration rate was 30 percent, according to the Pew Internet and American Life Project.

“By 2010, we expect that the percentage will exceed 60 percent,” Technology Futures predicted in 2001. The actual penetration wound up being 66 percent.

Google Fiber's gigabit networks might actually push 100 Mbps access, in the near term.

In PCs, Smart Phones, Apple Has no Profit Competition

Apple wins, nearly everyone else struggles, in the personal computer market, where it comes to actual profit. That is the same story seen in the smart phone business, where Apple earns perhaps 71 percent of all industry profits .

Will U.S. Mobile Market be Lead by 2, 3 or 4 Providers?

There’s an inherent tension between promotion of competition and the normal and expected working of any market. 

In fact, one might well argue that market concentration is the inevitable result of consumers making choices. In other words, people buy the products and services they consider better.

That inevitably means the less-preferred providers go out of business or are bought by the more-successful suppliers. 

That leads to market concentration, and at some point, a reduction of competition and the benefits competition normally brings.

That sooner or later leads to regulatory action to break up successful firms and reignite competition, whereupon the cycle starts again. Telecommunications is the sort of industry, though, that causes issues.

It is a capital-intensive business, and like most capital-intensive businesses, has high barriers to entry. That means, under even the best of circumstances, that there will be relatively few suppliers in a market, because the market simply cannot support more than a handful.

The issue is “how many” firms it takes to sustain reasonable levels of competition. In France, the minimum number of suppliers in the mobile market is deemed to be four. 

In other markets, the number might be three. It is probably unlikely that the number two will be viewed as so reasonable.

So consolidation in Canada, the United States, France or anywhere else is pretty much just part of the normal dynamics of any competitive market. But it isn't so clear just how much consolidation regulators will permit.

The biggest question is whether U.S. regulators would allow Sprint and T-Mobile USA to merge, a possibility executives of both companies have talked about. The Department of Justice seems to be signaling that it would not allow such a merger.

Some think such a merger would not be approved, based

on the market concentration formula used by the DoJ and Federal Communications Commission.

Global Undersea Bandwidth Growth Shifts to Emerging Regions

Though overall demand for international bandwidth grew 39 percent in 2012, supply grew most strongly on routes connecting to emerging markets in Asia, Africa, the Middle East, and Latin America, TeleGeography says.

While bandwidth demand on the trans-Atlantic route--long the world’s highest-capacity route-- increased 36 percent annually between 2007 and 2012, demand for bandwidth from the United States to Latin America grew 70 percent per year over the same period,

At the same time, demand for capacity on the Europe-Asia route by way of Egypt grew 87 percent per year.

Carriers have kept up with increasing bandwidth demand by building new cables and upgrading existing systems, deploying a total of 54 Tbps of new capacity between 2007 and 2012, TeleGeography says. Over time, more of that capacity has been added on the routes connecting to emerging markets.

Between 1997 and 2002, the amount of new capacity deployed across the Atlantic was greater than the amount deployed on the trans-Pacific, US-Latin America, Intra-Asia, and Europe-Asia routes, combined.

Between 2002 and 2007, nearly half of all new capacity was deployed on the trans-Atlantic route.

Since 2007, each of the world’s major routes gaining between 10 Tbps and 12 Tbps.

Globally, emerging markets remain crucial for global telecom service provider growth. IDC predicts that emerging markets will contribute for 53 percent of 2012’s global information and communications technology growth.

Mobile will drive growth in the Asia-Pacific region, as elsewhere. But developing nations also will become the focus of broadband growth over the next decade or two, building on a substantial amount of growth since about 2005.

Mobile Commerce: eBay Leads

Some 14.3 percent of an Arbitron panel use the eBay mobile app. making eBay the top app for mobile shopper. 

The eBay mobile app was used, on average, for about 34.6 sessions, for an average of one hour and 48 minutes, during the February 2013 period, according to Arbitron, 

Mobile App	User %	Minutes/Month	Sessions/Month
eBay	14.3	108.4	34.6
Amazon Mobile	13.0	40.0	10.9
Groupon	11.1	22.2	9.1
Passbook	8.1	2.0	2.6
Craigslist Mobile	6.6	80.4	17.3

eBay is Top Mobile Commerce App

Some 14.3 percent of an Arbitron panel use the eBay mobile app. making eBay the top app for mobile shopper. 

The eBay mobile app was used, on average, for about 34.6 sessions, for an average of one hour and 48 minutes, during the February 2013 period, according to Arbitron, 

Mobile App	User %	Minutes/Month	Sessions/Month
eBay	14.3	108.4	34.6
Amazon Mobile	13.0	40.0	10.9
Groupon	11.1	22.2	9.1
Passbook	8.1	2.0	2.6
Craigslist Mobile	6.6	80.4	17.3

Will Softbank Respond to Dish Network Offer for Sprint?

At least so far, there has been no counter offer from Softbank for Sprint. That is not unexpected, given the surprise offer made by Dish Network , which apparently was learned of by Softbank directors only shortly before they began a scheduled board meeting. 

What remains now for Sprint directors is a tough assessment of the merits of each offer. Setting aside for the moment which offer is worth more, since that could change, which direction would give Sprint a greater chance to dramatically improve its fortunes in the U.S. market?

As most immediately would note, Dish Network has spectrum assets to contribute, and arguably is in a better position to reduce operating costs by eliminating "redundancies" and overlap in the Sprint and Dish Network operations. 

Dish argues such savings might result in more than a billion dollars. But Softbank would bring more scale in the mobile segment of the business. 

But either firm stands to gain something tactically, even if a strategic defeat occurs. Others would note that Softbank will be paid a $600 million breakup fee if its bid to buy Sprint were rejected. And Ergen has in the past managed to wring value out of other "bets."

Until recently, many observers were convinced Dish Network actually intended all along simply to acquire and then sell its spectrum holdings, and really had no intention of getting into the mobile business. 

One Other Way the U.S. Higher Education System is Failing its Students

About 48 percent of employed U.S. college graduates are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education, Center for College Affordaility and Productivity.

Some 11 percent of employed college graduates are in occupations requiring more than a high-school diploma but less than a bachelor’s, and 37 percent are in occupations requiring no more than a high-school diploma, a Center study finds. 

The proportion of overeducated workers in occupations appears to have grown substantially. In 1970, fewer than one percent of taxi drivers and two percent of firefighters had college degrees, while now more than 15 percent do in both jobs.

About five million college graduates are in jobs the BLS says require less than a high-school education.

The point is that most students go to school to get jobs, but the credentialing process is a massive waste of time and money for many. Apprenticeships would make more sense, for example. 

Mobile TV Not a Great Substitute for Linear TV Delivery, Study Finds

An analysis by researchers at the KTH Royal Institute of Technology suggests that it is not generally spectrum efficient to substitute use of mobile networks for delivery of linear video entertainment, assuming the goal is to replicate the same coverage and types of content now delivered by the local TV broadcasting network.

That will not come as a surprise to anybody who ever has pondered the network bandwidth implications of unicast and multicast video programming. 

On the other hand, the efficiencies could tip to mobile networks when the programming mix skews to specialized programming, localized content and on-demand viewing. 

By definition, unicast delivery is better suited to communications rather than traditional content delivery networks. 

The Mobile Web is 30% Faster Than a Year Ago, Study Finds

Since 2012, desktop Web access median and mean speeds have gotten better by a little, but in a context of typical Web pages getting 56 percent bigger.

Mobile access is around 30 percent faster compared to last year, a Google study has found. 

Verizon Adds New Device Installment Payment Plan

Verizon Wireless seems to have concluded that it makes sense to separate recurring service plans from device installment plans, and has launched a Device Payment Plan that offers the same advantages of phone subsidies, with the advantage of allowing Verizon Wireless to advertiser lower recurring monthly fees.

Under the new plans, consumers will buy their devices over a year, in installments, with a separate charge for service, as T-Mobile USA has done. It is not so clear that consumers actually will save money when using the new plans, especially if they change devices frequently.

But the marketing advantages are clear enough for Verizon. It will now be able to advertise lower monthly prices.