FCC Opens Inquiry into Google Voice Blocking

The Federal Communications Commission has opened an inquiry into Google Voice's call blocking of traffic to some high-cost numbers used by free conference calling services.

Google does not deny blocking access to those numbers, but argues it is a Web service offering an optional call connection service, and does not have a common carrier obligation to deliver calls to virtually any phone number.

AT&T obviously believes Google Voice has to terminate those calls, even though it is an application, not a common carrier provider of voice services.

Google says its phone management service isn't subject to common carrier telephone rules because it is free and consumers can use it only if they have a traditional telephone line.

AT&T and other carriers say they don't want to pay high access charges either, and do not believe any providers of termination services should be able to selectively block calls.

It isn't yet clear where the inquiry might lead, but it is another reminder that the regulatory framework that treats common carriers differently from application providers is intellectually incoherent.

The only issue is whether we are yet at a regulatory tipping point where some drastic revision is needed.

For at least three years, regulators have debated--without clear conclusion--where voice services over the Web fit in. Web services, which can include Skype, maybe Google Voice, and Comcast Digital Voice, are for now viewed as information services and not subject to the more heavily regulated treatment "service providers" are subjected to.

What is clear is that the old distinctions are becoming unworkable.

"Much as the FCC wishes there was still a clear distinction between 'the Internet' and 'the telephone network,' technology has obliterated that difference," Larry Downes, a non-resident fellow at the Stanford Law School Center of Internet and Society, notes.

He proposed the FCC wipe the slate clean: "Hold everyone to the same rules regardless of what information they are transporting-whether voice, video, television, data. Because regardless of who's doing what, these days it's all bits."

Such a sweeping reform necessarily would mean ending the way the nation now regulates cable TV, telephony and the Internet. That will ruffle lots of feathers, but it has been clear for some time that the differing regulatory frameworks increasingly are old of step with market realties.

To wit, we use one set of rules for "telcos," a different set of rules for "cable companies" and a third set for application providers, even when they offer similar, iidentical, overlapping or functionally similar services and applications.

"If it walks like a duck, talks like a duck, it's a duck" is a non-technical way of dscribing how the FCC traditionally has looked at resolving questions within the common carrier world. As more providers enter that business, but with different regulatory treatment, there has to be pressure to treat all ducks as ducks.

3% Consume 40% of Mobile Bandwidth, AT&T Says

The top three percent of smartphone users consume 40 percent of all mobile data bandwidth, says AT&T Mobility and Consumer Markets president Ralph de la Vega. Those three percent of users also consume 13 times the data of the average smart phone user, he adds. Another way of quantifying such usage is to note that users who consume 40 percent of AT&T's mobile data bandwidth constitutute just 0.9 percent of all AT&T postpaid mobile subscribers.

The point was clear enough: Without adequate management of network access, most customers will find their experience damaged because of a small number of other users.

There are legitimate public policy concerns about anti-competitive behavior in the wireless and wireline businesses where it comes to gatekeepers of any sort using that power to impair competition. But that is a different and distinct matter from the obvious need to manage shared network resources in ways that actually preserve reasonable access for all other users.

De la Vega used the word "crowd out" to describe such contention, and it is a legitimate issue. Anti-competitive actions certainly are to be protected against. But there are valid network resource managment issues that obviously have to be addressed as well, especially in the wireless domain.

Beyond that, there are valid reasons for wanting competition protected, but without stifling consumer access to new products that offer mass market customers features enterprise users take for granted, such as the ability to prioritize their own use of bandwidth to perserve performance of mission-critical applications. If any consumer end user wants to prioritize their own video, voice or other bits, they ought to be able to do so.

There is nothing anti-competitive about this, so long as any applications in the class can receive such prioritization. Consumer advocates are right to note that issues can arise if voice bits sold by the ISP can be prioritized, but not voice bits sold by other competing service providers.

Some approaches will work better than others, and that is an issue one would hope policymakers take seriously into account as new "neutrality" rules are crafted.

Telemedicine Spending to Approach $3.6 Billion Annually by 2014

Wireless service providers likely will be key beneficiaries of increased spending on tele-medicine services and devices will generate nearly $3.6 billion in annual revenue within the next five years, says Pike & Fischer Senior Analyst Tim Deal.

The need to control health care costs, along with the development and expansion of faster wireless broadband networks, smartphones, and data compression solutions, will drive the market growth, Deal says.

Wireless applications, devices, and services solutions will account for more than 70 percent of the total market spend within five years.

Driving that spending is the economic stimulus law that President Obama signed earlier this year. That initiative includes $20 billion for health information technology, with a specific focus on electronic medical records and telemedicine, Deal says.

"We project that at least 25 percent of the $20 billion in stimulus funds earmarked for health information technology will be applied toward broadband-enabled telemedicine services such as remote patient monitoring and mobile access to medical records, and consumer applications such as interactive fitness guides and mobile health-related videos," says Deal.

AT&T will have the largest presence in this market, followed closely by Verizon and Sprint Nextel, Deal projects.

AT&T Chief Warns About Heavy Users

The top three percent of smartphone users consume 40 percent of all mobile data bandwidth, says AT&T Mobility and Consumer Markets president Ralph de la Vega. Those three percent of users also consume 13 times the data of the average smart phone user, he adds. Another way of quantifying such usage is to note that users who consume 40 percent of AT&T's mobile data bandwidth constitutute just 0.9 percent of all AT&T postpaid mobile subscribers.

The point was clear enough: Without adequate management of network access, most customers will find their experience damaged because of a small number of other users.

There are legitimate public policy concerns about anti-competitive behavior in the wireless and wireline businesses where it comes to gatekeepers of any sort using that power to impair competition. But that is a different and distinct matter from the obvious need to manage shared network resources in ways that actually preserve reasonable access for all other users.

De la Vega used the word "crowd out" to describe such contention, and it is a legitimate issue. Anti-competitive actions certainly are to be protected against. But there are valid network resource managment issues that obviously have to be addressed as well, especially in the wireless domain.

Beyond that, there are valid reasons for wanting competition protected, but without stifling consumer access to new products that offer mass market customers features enterprise users take for granted, such as the ability to prioritize their own use of bandwidth to perserve performance of mission-critical applications. If any consumer end user wants to prioritize their own video, voice or other bits, they ought to be able to do so.

There is nothing anti-competitive about this, so long as any applications in the class can receive such prioritization. Consumer advocates are right to note that issues can arise if voice bits sold by the ISP can be prioritized, but not voice bits sold by other competing service providers.

Some approaches will work better than others, and that is an issue one would hope policymakers take seriously into account as new "neutrality" rules are crafted.

FCC Chair Promises More Mobile Spectrum

"What happens when every mobile user has an iPhone, a Palm Pre, a Blackberry Tour or whatever the next device is?" asks Federal Communications Commission Chairman Julius Genachowski."What happens when we quadruple the number of subscribers with mobile broadband on their laptops or netbooks?"

"The short answer: we will need a lot more spectrum," he says. So look for the FCC to explore ways to promote spectrum efficiency and use of Wi-Fi, for example.
 
"Wi-Fi allows carriers to offload to fixed broadband as much as 40 percent of traffic in the home, freeing up capacity of licensed spectrum," he says.

But even efficiency measures do not alleviate the need for more spectrum. So the FCC chairman says he will work on reallocating spectrum currently being used for other purposes.

U.S. Wireless Data Hits New High

Wireless data service revenues climbed to more than $19.4 billion for the first half of 2009, CTIA-The Wireless Association says. This represents a 31 percent increase over the first half of 2008. In addition, wireless data revenues were more than 25 percent of all wireless service revenues.

The survey also found that more than 246 million data-capable devices are in use, while more than 40 million of these devices are Ssmartphones or wireless-enabled PDAs. More than 10 million are wireless-enabled laptops, notebooks or aircards.

More than 740 billion text messages carried on carriers’ networks during the first half of 2009, roughly 4.1 billion messages per day. That’s nearly double the number from last year, when only 385 billion text messages were reported for the first half of 2008.

Wireless subscribers are also sending more pictures and other multi-media messages with their mobile devices—more than 10.3 billion MMS messages were reported for the first half of 2009, up from 4.7 billion in mid-year 2008.

As of June 2009, the industry survey recorded more than 276 million wireless users. This represents a year-over-year increase of nearly 14 million subscribers.

Wireless customers used more than 1.1 trillion minutes in the first half of 2009—breaking down to 6.4 billion minutes-of-use per day—and six-month wireless service revenues of nearly $76 billion.

Study Finds Consumers Do Not Want Targeted Ads

“Contrary to what many marketers claim, most adult Americans (66 percent) do not want marketers to tailor advertisements to their interests, s new study from the Annenberg School for Communication, University of California Berkeley School of Law and the Annenberg Public Policy Center suggests.

“Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages— between 73 percent and 86 percent—say they would not want such advertising,” the Annenberg study says.

Respondents showed somewhat more interest in receiving personalized discounts and news, but still, less than one-half of Americans wanted any tailored Web content at all.

That was true of consumers in every age group—even young adults ages 18 to 24 were more likely to say no to behavioral targeting than to accept it, except for discounts.

More than two thirds of respondents to the Annenberg/Berkeley study felt they had lost control over their personal information. At the same time, however, they believed businesses handled their data well and that they were already protected by current regulations.

One suspects the responses might be different if consumers are asked whether they would be willing to receive tailored messages in exchange for some other tangible benefit, such as lower Internet access costs, free text or lower-cost voice, discounts or other tangible benefits.

The precedent is TV commercials. Just about everybody says they do not like commercials. But if asked whether they would rather watch TV without commercials, if the cost were higher, most people then say they will choose an ad-supported service.