Gigablit Libraries Network to Test TV White Spaces for Internet Access

The Gigabit Libraries Network (GLN) has picked six library systems across the United States for tests of TV white spaces based Internet access for libraries.

More than 50 library systems and consortia applied for projects. Six projects, one each in Kansas, New Hampshire, Mississippi, Illinois, California and Colorado) have been accepted and will receive equipment to run trials through the end of 2013, using Wi-Fi access points on “e-bookmobiles” and in other publicly accessible places in their communities.

The pilot will demonstrate how integrating these two wireless communication technologies can benefit library users by combining the near universal compatibility of Wi-Fi with the range of TV white spaces equipment.

Participating libraries will have an option to purchase the gear and the end of the trial. The national pilot project grew out of a local wireless initiative of the Kansas City K20-Librarians Consortium, announced in May to upgrade bandwidth to a remote Kansas City, Kan. public library branch having only a T1 connection.

Carlson Wireless,  KTS Wireless and Adaptrum Inc. and iconectiv  are the four suppliers of gear and database services for the tests.

Participating library systems and consortia are located in Delta County, Colo.; Pascagoula, Miss.; Skokie, Ill.; Humboldt County, Calif.; Kansas City, Lawrence, Manhattan, Topeka/Shawnee, Kansas, in addition to New Hampshire.

Slovakia Begins 4G Spectrum Auction

Slovakia has begun auctioning 4G spectrum in multiple bands. The country’s regulator TUSR has stated that bidders have until October 7th to submit offers for frequencies in the 800MHz, 1800MHz and 2.6GHz bands.

It is expected that some 1800 MHz spectrum will be reserved for a fourth player to compete with Slovakia’s “big three” of Orange, Slovak Telecom and O2.

Orange is the biggest operator in Slovakia with 2.8 million subscribers, followed by Slovak Telecom (2.3 million) and then O2 (1.4 million). One should expect all of the three dominant providers to place bids to win spectrum. The question is which new firm might be a fourth winner of spectrum.

Czech investment group PPF, headed by Petr Kellner, has confirmed its interest in bidding in the auction. The group’s subsidiary PPF Mobile Services (PPFMS) wants to become the country’s fourth mobile operator.

Other potential bidders include broadcaster Towercom, video services provider Satro and broadband operator SWAN.

Telecom regulator TU SR says new 4G license winners must build networks covering 50 percent of the population with its own network by the end of 2018. In a switch, though, 4G license winners will not have mandatory wholesale obligations, and instead will be allowed to negotiate any such wholesale deals on a commercial basis.

EC Digital Commissioner Backs Off 90% Roaming Rate Cuts

European Commissioner for Digital Agenda head Neelie Kroes apparently has decided to back off a plan to massively reduce wholesale interconnection rates between 70 percent and 90 percent within the 28-country European Union region.

But she tweeted "roaming fees will still end - debate is over how, not whether."

— Neelie Kroes (@NeelieKroesEU) August 29, 2013

Some would credit opposition from EU service providers. Others would say opposition from EC competition officials is the more likely reason for the change.

The revised proposal is scheduled to be released on September 10, 2013.

To become law, the proposal requires approval from the 28 EU members countries and European Parliament.

The abandonment of the severe rate reduction plan illustrates some policy tensions beyond the normal friction between industry interests and regulator desires.

As sometimes happens, different influencers within the government regulatory sphere appear to have had dramatically different views about what should be done.

At least in part, those differences reflect the inherent tension between policies that appear to be beneficial to consumers (mandated lower rates and enhanced competition) in the short term, but are harmful in the long term (less investment in next generation networks).

In an earlier draft of her proposals seen by Reuters, Kroes proposed a cap of €3 cents per minute for voice calls from July, 2014 to June 2022, a 70 percent reduction from the €10 cent cap which came into effect in July 2013.

She also wanted to slash the wholesale cap for data roaming to €1.5 cents per megabyte from the current limit of €15 cents.

European Commission officials, according to the Financial Times, already had been thinking about amending the wholesale roaming proposals put forward by Kroes.

As was the case in the U.S. market, regulators are grappling with ways to balance two contradictory goals: expanding competition and also encouraging investment.

There has been concern that the big reductions in wholesale rates, intended as a way of encouraging the creation of a single EC communications market, would further depress service provider revenues and so hinder investment in next-generation networks.

Service providers were concerned, among other things, about the opportunity for arbitrage opportunities. That typically happens in communications when there is a wide disparity between wholesale rates and retail rates in any market.

Some had estimated that as much as £7 billion a year could be earned by wholesalers taking advantage of the rate spread. Such arbitrage discourages investment in facilities on the part of incumbents and over the top or wholesale-based competitors as well.

Analysts at Bernstein Research had estimated the rate reduction proposals would allow non-facilities-based rivals to undercut major network operators by between zero and 65 per cent, depending on prices in each country.

The biggest potential impact, they say, would be in some of Europe’s biggest markets, Bernstein Research argued.

Skype Marks 10th Anniversary

It hardly seems possible that we are upon the 10th anniversary of the launch of Skype on Aug. 29, 2003. A decade later, 300 million users make two billion minutes of online video calls a day.

Perhaps to mark the occasion, there is news that Skype is working to create 3D calling. That would be a welcome bit of innovation for a service that some think has not innovated so well in quite some years.

“In some ways Skype is a victim of its own success,” said Taavet Hinrikus, the company’s first employee. “It stopped innovating. The last meaningful thing to be launched by Skype was video calling in 2005.”

Others might argue that acquisition first by eBay, then by Microsoft, explains Skype’s inability to compete with messaging apps, for example.

Microsoft paid $8.5 billion for Skype in 2011.

Will Verizon Sell its Fixed Network, After Buying Vodafone's Verizon Wireless Stake?

Verizon and Vodafone might once again be talking about allowing Verizon Wireless to acquire all of Vodafone's stake in Verizon Wireless. For some of us, the big question is not whether the deal finally will succeed. 

Instead, the big question, assuming Verizon Communications is able to take full equity ownership of Verizon Wireless, is what Verizon might later decide to do about its fixed network assets.

Though it might come as a shock, in its most recent quarter, Verizon Communications earned only a bit more than 14 percent of its total revenue from fixed network services. 

About 86 percent is earned from mobile services.

That is one good reason why Verizon Communications has wanted to acquire full ownership of Verizon Wireless. Doing so funnels all of the revenue growth and profit back to Verizon Communications, instead of just 55 percent of the growth.

But some of us do wonder whether it actually makes good sense for Verizon to own assets that contribute 14 percent of revenue, and less growth or profit margin, when it might be able to sell the assets and then purchase other mobile assets in new markets.

So, for some of us, the big issue is not whether Verizon Wireless will be fully owned by Verizon Communications. The huge implication is whether Verizon might get out of the business of being a fixed network services provider.

That could have huge implications for any number of competitors and allies.

Verizon Communications owns 55 percent of Verizon Wireless and has wanted to buy the rest for years. The deal might involve something north of $100 billion, up to perhaps $130 billion. “Why now?” is a good question, as rumors about a sale of the Vodafone stake to Verizon Communications have been held on and off for years.

Some would say the expectation of rising interest rates is a very good reason for moving

now. Most expect any Verizon Wireless purchase of the Vodafone stake would involve a combination of stock and cash. And that cash would be borrowed.

Hence, moving now would save Verizon quite a lot of interest expense. Some believe Verizon would have to borrow about $60 billion. At a five-percent annual interest rate, interest would initially amount to $3 billion or so. At six percent interest rates, annual interest payments would grow $600 million. At seven percent interest, annual interest payments would rise to perhaps $4.2 billion.

From Vodafone’s perspective, the big issue is what to do with the proceeds of the sale, after tax payments of perhaps $10 billion. Most observers have assumed Vodafone would use some of the proceeds to reduce its own debt, and part of the funds to make capital investments or buy additional assets.

For observers of the U.S. communications market, the big issue is how Verizon might view the value of its fixed network assets. As crazy as it might seem, Verizon might consider selling off its fixed network assets. Those assets contribute 14 percent of revenue and likely will continute to drop as a percentage of total revenues.

Comcast to Launch 250 Mbps in Provo for $80 a month

Can an offer of 250 Mbps for $80 a month compete with an offer of 1 Gbps, symmetrical, for $7-0 a month? Comcast will find out sometime over the next year or so, as it launches a new 250 Mbps service for $80 a month that resets teh value-price relationship for access bandwidth and pricing. 

Debate over "Fiber to Home" Versus "Fiber to Node" Erupts Again in Australia

Oddly enough, for some of us, a debate over access network architecture, specifically fiber to the home or fiber to the node, appears to be an issue in upcoming Australian elections.

The reason is that the two main contenders disagree on which network architecture to use for the National Broadband Network.

One might argue that, given escalating demands for bandwidth, and national policies aiming to boost speeds to 100 Mbps by 2020, for example, that fiber to the home makes more sense. But others argue that the less-expensive fiber to node architecture will suffice.

The argument is an old one. Verizon Communications opted for fiber to the home. AT&T opted for fiber to the neighborhood (essentially, fiber to the node). U.S. cable operators likewise have opted for a fiber to the neighborhood approach.

But those older debates are more complicated than in the past, because of huge changes in revenue expectations. It never was necessary to build fiber access networks to support voice. All-copper networks work just fine for that application.

The other problem is that the voice business is shrinking, as users opt for mobile phones as their preferred way of calling. Mobile also is the preferred platform for messaging.

So the argument for fiber to the home explicitly relies on an assumption that new revenue sources can be found. In that respect, the argument is that fiber to the home works better, long term, for high speed access, and that video services also can be supported.

The former argument makes sense, but has not yet proven to be a show stopper, though Google Fiber’s symmetrical 1 Gbps for $70 a month could help settle the argument.

The latter argument, that fiber to the home is required for linear TV, likewise has not proven decisive, as both Verizon and AT&T are able to deliver linear TV services using either architecture.

Beyond that, there are concerns about the longevity of the video revenue stream, and questions about how much speed consumers will really want to pay for. Of course, Google Fiber hopes to upset those expectations.

Given all that, ironically, the debate over network architecture remains unsettled. Some rationally will argue the best policy is to invest as little as possible in fixed networks and emphasize mobile networks.

Under either scenario--fiber to home or fiber to node--the NBN would be a wholesale network. The fiber to home network has been estimated to cost A$44.1 billion and be finished about 2021.

The FTTN network could be finished by 2019, at a total cost of A$29.5 billion.

The FTTN network will provide download speeds of 50 Mbps network, while the fiber to home network will initially provide download speeds up to 1 Gbps.

But the analysis is more complicated than that. Under either scenario, rural areas will be served by satellites. But the access in other areas is mixed. The “fiber to home” proposal actually uses fixed wireless in many moderately-dense areas while only urban areas get fiber to the home.

Under the “fiber to the node” plan, satellites still would be the only viable option in rural areas, while fiber to the node would be used for retrofit areas, and fiber to the home deployed in all areas of new home construction.

The differences are exacerbated by uncertainty about future demand. The average Internet connection speed in Australia is currently 4.2 Mbps, for example.

But usage also seems to climb over time. For that reason, some believe broadband customers will be buying services of more than 100 Mbps by 2020 and about 1 Gbps by 2035.

Some argue that it simply makes more sense to put in fiber to the home now, even if it costs more.