Verizon Filing Highlights Regulatory Chaos

It has been obvious for some decades that traditional methods of "regulating" distinct industries was going to become complicated as virtually all services and media could be carried over a single infrastructure, by firms that once were in distinct businesses, with different regulatory frameworks.

Verizon now is testing those frameworks, as it argues that network neutrality rules violate its free speech rights under the First Amendment to the U.S. Constitution.

In the past, newspapers and other media have been essentially "unregulated." TV and radio broadcasters have had more regulation, as have video service providers, while telecom companies have had the most extensive regulation.

So Verizon now argues that broadband providers have "editorial discretion" to give priority to their own Web content, and the U.S. Federal Communications Commission's net neutrality rules limiting that discretion is a violation of providers' free speech rights.

That is the same framework that governs cable TV and other video service provider services, so the argument is not unusual.

"Just as a newspaper is entitled to decide which content to publish and where, broadband providers may feature some content over others," Verizon argues.

The debate is not likely to end there, though, no matter what the courts rule. Today, contestants that provide identical services, such as cable TV and telco entities, are regulated under distinct and different frameworks. Beyond that "unfair" treatment, there is the broader issue of how to reconcile the "media" model of "no regulation" with the common carrier "heavy regulation" models, when a single company provides services in virtually every regulatory bucket.

When Will Amazon Become a Service Provider?

Some think it’s just a matter of time before Amazon starts reselling wireless data services on its own, under its own brand name.


Offering prepaid cellular service wouldn’t be a huge stretch for Amazon. The company has offered its “WhisperNet” service since the very first Kindle, which uses Sprint’s EVDO network to offer anytime data connectivity to its e-readers, some would argue.


The objective likely would be to encourage more users to buy Amazon-branded tablets and smart phones, growing the potential audience for sales of Amazon digital and offline products.


The notion that Amazon will become a service provider seems less and less unusual. 

1/3 of U.S. Homes Have Cut Voice Cord

Some 34 percent of U.S.  homes used only mobile devices for phone service during the second half of 2011, an increase of 2.4 percentage points since the first half of 2011.

One might also infer that perhaps half of all U.S. homes might be candidates for going “mobile only,” as nearly one of every six American homes (16 percent) received all or almost all calls on wireless telephones despite also having a landline telephone, according to the July–December 2011 National Health Interview Survey of household communications.

In addition to those mobile-only households, among households with both landline and wireless telephones, 29.9 percent received all or almost all calls on mobile phones.

During the second six months of 2011, approximately 41 million adults (17.8 percent) lived in wireless-mostly households. This prevalence has remained largely unchanged since January 2010.

Hispanic adults (43.3 percent) were more likely than non-Hispanic white adults (29 percent) or non-Hispanic black adults (36.8 percent) to be living in households with wireless telephones only.

Among all wireless-only adults, the proportion aged 35 and over has increased steadily. In the second six months of 2011, half of wireless-only adults (49.6 percent) were aged 35 and over, up from 40.3 percentin the first 6 months of 2008.

What remains to be seen is whether different packaging and pricing of voice services could, or will, halt the landline slide. At least in principle, the new Verizon Wireless pricing of network access, which includes unlimited domestic texting and calling, could guarantee that use of voice and texting does not drop without end.

Amazon Smart Phone Could Eventually Lead to Key Industry Change

Rumors about an Amazon.com smart phone have been circulating, off and on, for a couple of years. They are circulating anew, suggesting that Amazon does want to field a branded smart phone, Bloomberg  reports.

Foxconn International Holdings, the Chinese device manufacturer, reportedly is working with Amazon on the device.


The interesting angle, some of us might say, is "why" Amazon wants to market its own smart phone. It doesn't especially care about voice or texting. What it wants is one more widely-deployed screen that can be the foundation for selling digital books, songs and movies. 


As with tablets, the smart phone now is viewed as a primary content consumption appliance. Of course, at some later point in time, service providers that make their money providing voice, texting and mobile broadband access might have to contend with something new, namely competitors with a different revenue model. 


In other words, mobile service providers might someday face competitors who would consider "giving away the product you sell," as they will have another revenue model, namely content and other sales. 


Amazon and Apple both have shown no hesitation to merchandise something to sell something else. In Apple's case, content is merchandised to sell gadgets. For Amazon, gadgets are merchandised to sell content and products. 


Someday, that might even encourage those firms, or others, to offer connectivity as well as gadgets and content, with the likelihood that connectivity revenue is merchandised to sell either gadgets or content or products. 

Will Apple iOS Platform Match or Eclipse Windows?

Historically, Windows has sold multiples of Apple devices. But that was when "devices" mean personal computers. These days, tablets and smart phones are seen by many as changing the equation. 


By some estimates, the Windows device lead peaked in 2004. So if one counts smart phones, tablets and PCs as the "universe of devices," Apple iOS might reach parity with Windows soon. 

New Bubble Metrics

Five years after the "dot.bomb" or Internet bubble, some would argue, investors already were at it again. Though many had suggested unprofitable technology companies with less than $100 million in revenue would not be able to "go public," that was happening.


By 2005, in other words, what had been "learned" in the aftermath of the Internet bubble were lost. In fact, some would argue matters are worse today, than in 2000 and 2001. 

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One Derecho Wrecks "Availability" Performance for the Whole Year

All it takes to degrade a 99.999 percent availability is a hurricane, derecho or other widespread weather or natural event. That "five nines" standard means annual outages of about five minutes, 26 seconds. 


Verizon says it continues to gain ground in restoring services to its wireline customers following the highly destructive June 29, 2012 Mid-Atlantic derecho that caused power outages to about three million homes and business locations, for at least some period of time. 


Verizon's wireline repair load currently is running two to three times normal levels. Many customers' voice, Internet and TV services are coming back as commercial power is restored, and Verizon crews are spread across the region to replace poles, re-hang downed lines and repair customers' services. As of July 5, 2012, field forces are responding to 156 downed utility poles and 897 downed copper or fiber cables in the region.

Uptime	Uptime	Maximum Downtime per Year
Six nines	99.9999%	31.5 seconds
Five nines	99.999%	5 minutes 35 seconds
Four nines	99.99%	52 minutes 33 seconds
Three nines	99.9%	8 hours 46 minutes
Two nines	99.0%	87 hours 36 minutes
One nine	90.0%	36 days 12 hours