While LightSquared Lawsuit Remains Unresolved, So Does a Test of Spectrum Sharing

While the fate of bankrupt LightSquared remains unresolved for the moment, also unresolved is a spectrum sharing plan proposed by LightSquared that could give a boost to LightSquared plans to emerge from bankruptcy, but also would be important for any new owner of the asset.

Lenders holding some $1.4 billion in claims against bankrupt satellite-communications firm LightSquared have joined a lawsuit by by Philip Falcone, LightSquared CEO, who alleges that DISH Network is trying to secure LightSquared licenses to valuable radio frequencies at a discount.

The lawsuit involves a complicated set of financial transactions in which two entities controlled by Charlie Ergen, Dish Network chairman, are alleged to have acted in ways that favor either Ergen or Dish Network, in Dish Network’s effort to buy LightSquared.

In part, that is because an entity controlled by Ergen secretly bought enough LightSquared debt to become a “secured lender” to LightSquared, which means that since LightSquared is in bankruptcy, Ergen has the ability to influence decisions by LightSquared.

Aside from those issues, LightSquared still is hoping the Federal Communications Commission will act on a request by LightSquared to trade about 10 MHz of spectrum that causes interference with GPS devices, for access on a shared basis to 5 MHz of spectrum now used by the National Oceanic and Atmospheric Administration (NOAA).

That request is viewed by some observers as a key test of how well spectrum sharing between commercial and government entities actually can work.

If LightSquared is able to demonstrate that its proposed spectrum sharing does not cause problems for NOAA, other spectrum sharing efforts likely will get a boost. The National Telecommunications and Information Administration (NTIA) has created a program to evaluate such spectrum sharing concepts.

The federal government has called for releasing about 500 MHz of government spectrum for shared use by mobile and fixed wireless providers.

10% of U.K. 5-Year-Olds have Mobile Phones

About 10 percent of all children five years old have  mobile phones, according to a new study. Some of you may realize this means those youngsters have mobile phones before they can read.

The typical age at which a U.K. child gets a mobile is 11. Some studies have found that U.S. kids tend to get their first phone at about age 12. 

Children spend an average of £11 a month on mobile costs, less than the parental average of £19, though just a quarter of parents cap their offspring's mobile phone bill, rthe study, conducgted by uSwitch.com, showed.

More than a million current under-16s had their first phone aged five, the study of 1,420 parents suggested.

When shopping for handsets, parents spend an average of £246 on themselves, more than the £125 they typically spend on the children's devices, uSwitch said.

How 1 Philippines Telco Monetizes Over the Top Messaging

Mobile service providers globally face big problems in the messaging space, as users are showing high preference for no incremental cost over the top messaging services, and less interest in paying for text messaging services.

But the issue for an access provider is how to monetize over the top apps. Globe Telecom in the Philippines thinks it has an answer. It sells access to a bundle of over the top apps including Viber, Facebook Messenger, Kakao Talk, WhatsApp, WeChat and Line, for 30 peso ($0.70) a day.

That fee also provides unlimited texting and unlimited calls to other Globe/Touch Mobile users.

In other words, Globe Telecom has created a low cost communications service including voice, text messaging and messaging app access, without requiring a bigger subscription to a full data plan.

Amazon Weighing its Own Mobile Network?

Speculation about whether leading application providers will ever want to become Internet access providers in their own right is not new. In fact, as Google has formally become an Internet service provider (Google Fiber, Starbucks Wi-Fi and other smaller tests) and has owned mobile spectrum, plus been a bidder on new spectrum, at least one app provider already has made the leap.

Now Amazon is said to have conducted testing of mobile or wireless network performance, using spectrum controlled by satellite communications company Globalstar. To be sure, companies test all sorts of things from time to time. 

So the move does not necessarily mean Amazon has decided to become more active in the ISP business. One might simply note that Amazon is indirectly involved already. It buys capacity from mobile service providers to deliver content to Kindle devices. 

As T-Mobile US and SoftBank-owned Sprint make assaults on the existing structure of the mobile market, many would argue an equally big disruption could come from the entry of a major application provider such as Amazon into the mobile or untethered ISP business. 

Some say Amazon is testing a new untethered protocol, not Long Term Evolution. 

Google Project Loon (Internet by Balloon) Continues Testing

Project Loon is an effort Google is making to evaluate whether it is possible to provide Internet access using free-floating balloons that will drift with the wind west to east south of the equator.

Given a sufficiently large fleet of balloons with a bit of maneuverability, Google wants to understand whether such balloons can be used to provide low-cost Internet access to hundreds of millions, if not a billion people in the southern hemisphere.

Recently, Project Loon says, it has been  conducting research flights in California’s Central Valley, testing power systems (solar panel orientation and batteries), envelope design, and radio configuration. 

"On our most recent research flight we overflew Fresno, a nearby city, to get statistics on how the presence of lots of other radio signals (signal-noise) in cities affects our ability to transmit Internet," Project Loon says.

"It turns out that providing Internet access to a busy city is hard because there are already many other radio signals around, and the balloons’ antennas pick up a lot of that extra noise," Project Loon staffers say.

This increases the error-rate in decoding the Loon signal, so the signal has to be transmitted multiple times, decreasing the effective bandwidth.

That is just one of the practical issues Project Loon has to overcome. At a completely different level, there is the issue of how nations might react to balloons overflying airspace. Project Loons do not orbit in space, and neither do they fly as high as airliners. 

But that might raise some sovereignty issues. Not every national government truly wants its people to have unfettered access to information. 

Are Mobile Networks a Viable Substitute for Fixed Networks?

Are mobile networks a viable substitute product for services provided by fixed networks? 

As with most big questions, the answers are nuanced. Though some would still point to the utility of emergency calling services, most consumer observers and users have voted with their wallets in favor of the notion that mobile voice is, in fact, a nearly perfect substitute for fixed voice service. 

The extent to which mobile works equally as well for business voice is less obvious, but views continue to change. 

Perhaps the bigger issue is whether mobile is a viable substitute for wired network broadband services. 

And there the notion of “perfect substitute” works less well. Mobile networks require spectrum resources that are more finite than the bandwidth that can be delivered by waveguide networks, and always will be more finite. 

In principle, waveguide networks can use spectrum far broader than available to mobile or any other over the air networks. 

And each waveguide network can reuse the same bandwidth as that used by its competitors, in the same locations, something that is impossible for mobile and other over the air networks using licensed spectrum. 

In developed markets, the contrasts are more stark. In emerging markets, the practical choice is not between a more-limited mobile network and a fiber network, but between a mobile network and no network. 

 The other crucial difference between fixed and mobile networks lies not just in bandwidth, but in the cost of using that bandwidth. 

On a cost-per-bit basis, a wired network will always have an advantage over a mobile network. 

A laptop‑based wireless broadband basket (offers within the 500 MB per month range) cost USD 13.04 on average across the OECD in purchasing power parity (PPP) terms, although it reached USD 30 in some countries. 

That is equivalent to $26 per GB of usage. As always, price per GB drops as the size of usage buckets increases. Average expenditure was USD 37.15 for a 10 GB basket. A 5 GB basket for tablets cost USD 24.74 on average, but varied from USD 7.98 (Finland) to USD 61.84 (New Zealand). 

Consider that many wired network plans either have no usage limits (Google Fiber and some others) or usage limits as high as 250 GB a month, for prices of perhaps USD 50. 

The point is that although mobile Internet access might be roughly comparable for moderate usage scenarios, wired networks win, hands down, for high usage scenarios. And mobile networks are more expensive at low usage levels. 

 Using the OECD data, one can calculate that the price per gigabyte of usage is about $3.71 to $4.81 for a mobile broadband plan (just a dongle). The wired network might cost $5 to $10 per GB.

Why Over the Top TV Won't Necessarily Save You Money

It's too early to say whether most consumers will save money if, one day, they are able to buy TV shows one by one, or at least channel by channel. Logic suggests people should be able to save money.

They might buy fewer channels, since most people actually watch seven to 12 of all the channels they pay for as part of a cable TV, satellite TV or telco TV subscription. In principle, that could offer some savings.

The same logic might apply to purchases of single shows. 

And you might think that "cutting out the middleman" (cable TV, satellite TV or telco TV supplier) would offer a further chance to save money on retail purchases of content.

Maybe. Maybe not. Ignore for the moment the issue of whether higher Internet access spending will be one incrementally higher cost to pay, since all that TV consumption will chew through perhaps a gigabyte an hour. 

If a person watches TV five hours a day, that's 35 gigabytes a week, and 140 GB a month. If there is more than one viewer in a household, the numbers will likely be higher, since it is quite rare for two or more people to prefer to watch exactly the same content, at exactly the same time, in the same location within a home. 

Also, use of digital video recorders also will consume bandwidth at the same rate as watching real-time TV. 

DirecTV pays $1 billion a year for Sunday Ticket. DirecTV earns about $725 million a year in Sunday Ticket revenue from about 2.8 million subscribers, Citigroup estimates.

Switching to online delivery will not automatically change those economics in a helpful way, either for a provider or a subscriber. 

Perhaps the answer to many such questions involves asking what Google might do. But you see the point: content costs alone, irrespective of marketing, network and operations costs, make content an "expensive" item. 

And make no mistake, nobody in the content business is dumb. Content distribution changes only when content owners think they can switch, and still make as much, or more money than before. 

So only after widespread licensing of content occurs will we be able to ascertain whether linear TV is necessarily more expensive than over the top alternatives. In many cases, some of us would be willing to bet, "saving money" will not be so easy.