Google and Verizon Reach Net Neutrality Agreement

In a move intended to break the current logjam over network neutrality discussions, Google and Verizon have reached their own agreement on network neutrality principles, and the compromise offers something for most key stakeholders.


The agreement enshrines "best effort" access as the mandatory form of service consumers are sold. Internet access providers could not apply their own packet priorities to legal traffic. You might assume this precludes creation of new quality-assured applications. The agreement, though, seems to preserve this option, but makes it an option only application providers can supply.


Application providers, on the other hand, could create quality-assured versions of their applications, while ISPs cannot. 


The agreement also exempts wireless networks from any of the rules, and allows ISPs to create new managed services (sort of like cable TV or satellite TV) that are not limited to best effort features. 


The companies agree that there should be a new, enforceable prohibition against discriminatory practices. This means that for the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition.

In addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic. That is a key provision. It means an ISP cannot favor its own video services over rival video services, for example.

The proposal, however, also would allow broadband providers to offer additional, differentiated online services, in addition to the Internet access and video services (such as Verizon's FIOS TV) offered today. Such "managed services" would not be traditional "Internet access" or "broadband access" services, but rather new and separate services.

The Google-Verizon proposal also includes safeguards to ensure that such new online services must be distinguishable from traditional broadband Internet access services and are not designed to circumvent the rules.

The FCC would also monitor the development of these services to make sure they don’t interfere with the continued development of Internet access services.

Wireless broadband is different from the traditional wireline world, so the proposal refrains from applying new rules to wireless networks and services.

The Government Accountability Office would be required to report to Congress annually on developments in the wireless broadband marketplace, and whether or not current policies are working to protect consumers.

Both firms agree also about enforceable transparency rules, for both wireline and wireless services. Broadband providers would be required to give consumers clear, understandable information about the services they offer and their capabilities.

The two firms also call for new ability by the FCC to enforce these openness policies on a case-by-case basis, using a complaint-driven process. The FCC could move swiftly to stop a practice that violates these safeguards, and it could impose a penalty of up to $2 million on bad actors.

Both firms support reform of the Federal Universal Service Fund, so that it is focused on deploying broadband in areas where it is not now available.

Both companies say they favor turning the Federal Communications Commission's "Internet Freedoms" principles into enforceable rules. Those principles, already in place, stipulate that consumers have access to all legal content on the Internet, and can use what applications, services, and devices they choose.

Both firms hope the agreement can serve as the framework for the FCC's broader network neutrality rules.

[75% Verizon LTE Converage by April 2012

Verizon Wireless is aiming to have at least 75 percent of the country covered by its new LTE network by April 2012. Like DOCSIS 3.0 50 Mbps and 100 Mbps service, the headline numbers are more about marketing platforms than volume end user demand.

But we ought to get ready for another ratcheting up of the headline speed wars as Clearwire and Sprint defend their fourth-generation network and Verizon touts its new offering, while AT&T and T-Mobile USA make their own claims about network quality or speed.

Verizon Wireless 2010/2011 Roadmap is all about Android and LTE

Is Mobile Phone Market Bifurcating?

One feature of market structure in many highly-competitive markets is a bifurcated distribution of firms, measured by size (revenue, typically).

What one has tended to see in retailing and communications is a concentration of firms that are very large, a squeezing of the number of phones in the middle ranges, and then relatively lots of firms that are small.

Analysts at Deutsche Bank think that is happening in the mobile phone business as well, favoring devices that are high-end smartphones or low end devices.

In part, the new competitive pressures are the result of Apple's entry into the market, Deutsche Bank says.

"Hardware has become a commodity with heavy pressure on margins" while "software is the only way for vendors to differentiate their products." At the moment, that is favoring Apple and Android. 

The result is that the best software platforms at the high end are taking share from smartphones. The other trend is that "feature phones" in the middle are losing share to smartphones. The result might be called a barbell, with high volumes at the low end of the market and high end, but little in between.

One might also note a Pareto distribution, where a few market-leading firms are able to get the majority of share or profits. Deutsche Bank analysts note that Apple and RIM sell 10 percent of devices, but get 66 percent of the profit.

Apple and RIM Still Sucking Profits from the Smartphone Industry

Amazon Web Services a $2.5 Billion Business by 2014?

UBS Investment Research analysts Brian Pitz and Brian Fitzgerald estimate that in 2010, Amazon Web Services will generate about $500 million in revenues and will grow to $750 million by 2011. By 2014, it would bring in close to $2.54 billion in revenues.

Researchers at IDC estimate the 2014 global market for cloud computing services of as much as $55 billion.

UBS thinks revenue and profit from Amazon Web Services could have a material impact on Amazon as soon as the latter quarters of 2010.

Click on the image for a larger view. You may have to click once again once the separate image appears.

How Big is Amazon’s Cloud Computing Business?

Netflix for Android

Netflix is working on a streaming video application for smartphones running Google’s Android operating system, a Netflix employee and online job listing have each confirmed.

Netflix has posted two job listings on its website so far this summer, both seeking Android developers. The current listing is titled “Android Video Playback Expert,” and begins, “Netflix is looking for a great engineer to help us build Instant Streaming client implementations on Android devices.

Netflix Streaming Is Coming to Your Android Phone

Is Video the Killer App for 4G?

One can argue that access to  web applications has turned out to be the "killer app" for 3G.

One might also speculate that video might be the killer app for 4G.

Click the image for a larger view that shows the various channels consumers now use for video.

Clearwire LTE Plans Won't Be Long In Coming

Clearwire and Sprint Nextel have been dropping clear hints that Clearwire could adopt Long Term Evolution as an air interface, either alongside its existing WiMAX network or as an eventual replacement.

Since the U.S. wireless industry has been through technology transitions before, it isn't hard to suggest how it might happen, and when. Companies have had to make transitions from one air interface to another within a single generation of technology, as well as migrating customers from an older generation to a new generation.

Where one air interface is switched out in favor of another within a technology generation, the trick is to add all new customers to the new interface while allowing the legacy base of customers to dwindle through attrition. At some point, the old network then can be shut down without undue disruption.

Where an older generation network is replaced by a next-generation network, additional spectrum also is required. If Clearwire wants to shift air interfaces within the fourth generation, it would maintain current customers on WiMAX, while creating a new LTE network alongside WiMAX, signing up new customers on LTE, and allowing WiMAX customers to gradually shrink through attritiion.

That suggests Clearwire will not want to wait too long, as it will want to limit the number of WiMAX customers it has to support while the LTE network is populated with customers.

As an operational matter--and there are other issues to consider--moving sooner is better than moving later, especially given the larger number of customers now coming onboard on the WiMAX network because of the popularity of the Evo.

On the other hand, abrupt action is not required, or even preferable, as the practical details of interworking between LTE and WiMAX, in the core of the network, will have to be proven, in a full deployment mode.

Handset suppliers will also need some time to ready suitable handsets that interwork, as devices now can use either the 2G and 3G networks, or 3G and 4G networks. Alternatively, Clearwire could encourage single-network devices.

With most consumers on two-year contracts, and a natural handset replacement cycle that runs two to three years, customers can be moved to LTE as they replace their current WiMAX devices.

The point is that Clearwire has plenty of spectrum, and industry executives have lots of experience with technology transitions. It will take some planning, and some time, but it is a normal and expected part of the business that air interfaces and networks are changed, at least every 10 years, and sometimes sooner, for other business reasons.

LTE Tests Signal Clearwire Is Serious