45% of Mobile Service Providers Offer At Least One Zero-Rated App

Some 45 percent of mobile service providers operators offer at least one zero-rated app, and 65 percent of those zero-rate Facebook, according to a study by Allot Communications.

Some will see the partnerships between mobile Internet service providers and application providers as the key element. Others might focus on the notion of “zero rating” use of a few applications viewed as having high end user value.

That, in turn, is important because it illustrates the downside of “treating all apps equally.” Sometimes, especially in developing nations, app discrimination--providing one app at no charge--provides clear value for people.

Application “non-discrimination” and “no blocking” tends to be the language used by network neutrality supporters. Most people likely have no issue whatsoever with the notion that lawful apps cannot be blocked, in the U.S. market.

As useful as “no blocking” is as a political slogan or principle, new legislation to prevent such blocking arguably is unnecessary, as the Federal Communications Commission already enforces such principles.

“Application non-discrimination” arguably is the heart of the matter, but possibly for new reasons.

The original concern was use of quality of service mechanisms, especially packet prioritization, as opposed to the present “best effort only” level of service available to U.S. consumer Internet access customers.

The concern was that Internet service providers would create new tiers of service that offered better end user experience at times of network congestion, but that such services would lead to additional costs for application providers who wanted such access, as they now pay firms such as Akamai for content delivery services that provide similar benefits over the network backbones.

Recently, the rubric of network neutrality has been extended into other areas--including network interconnection--that similarly have “cost of doing business” implications for app providers.

Of course, extending an analogy too far can backfire. The concept of  “treating all apps equally” is attractive, and sounds eminently fair.

But mobile service providers in many developing markets find that treating apps quite unequally provides value for end users and creates demand for mobile Internet access.

In fact, about 85 percent of mobile service providers promote certain over the top apps--and not all apps--according to Allot Communications.

Quite often, mobile service providers also zero-rate Facebook, Twitter or WhatsApp, as a way of illustrating the value of mobile Internet access.

Social apps, in other words, have proven to be attractive “gateway” apps for consumers. Actual policies differ. Some service providers offer free Facebook access only for newsfeed text and

text postings.

Others offer free Facebook messenger use, while others zero rate all Facebook traffic, with no need for a mobile data plan.  

In 2012, 27 percent of operators sampled offered application-centric plans to their customers.

In 2014 these partnerships are up to 55 globally, according to Allot. And some 40 percent of application-centric charging plans focus on zero rating. The rest are premium services that do carry a retail price tag.

Application-centric plans often provide TV streaming, on-demand video streaming, music streaming and music storage. But GPS location services, parental control and tracking features often are offered for an additional fee.

"Customer Surly" and "Customer Friendly" Service: 2 Anecdotes

It's only one anecdote, but one does wonder whether incentives for "saving" an account could have something to do with what many could say is an overly-aggressive effort by one Comcast CSR to save an account, when the customer wanted to halt service. 

Few might consider the call a pleasant experience. 

I had the diametrical opposite experience recently when changing service levels for my mom's Verizon FioS video account. I needed to downgrade one premium video service and also end purchase of a backup and security service for the Internet access account.

The former downgrade was because she doesn't watch so much TV, and certainly was not watching the premium service. The latter downgrade was because, after moving mom to a Chromebook, the online backup and security package simply was unnecessary. 

I got everything done, right away, on the Verizon website, with no need to make a call, talk to a customer service representative and endure the "save the revenue" script I suspect I'd otherwise have encountered. 

To be sure, Verizon's customer-friendly approach to online downgrades meant Verizon did not have one more shot at avoiding the two downgrades. 

On the other hand, I appreciated the chance to quickly and easily accomplish a service level change without grief. 

Perhaps one should not conclude too much from just a couple of customer interactions with a major service provider. 

But it also is hard not to wonder whether a different approach is at work in these two instances. 

I probably am not the only potential customer, or existing customer, who has encountered what appears to be a deliberate effort by a service provider to make dropping or downgrading more difficult. 

Can 5G Erase Difference Between Mobile and Fixed?

Though it is early to specify what characteristics future fifth generation (5G) mobile networks will feature, at least some think 5G will be the first next-generation mobile network with a specific applications focus and the first mobile platform that erases performance differences with the fixed networks.

Those are among some of the conclusions one might draw from the 5G “Public Private Partnership,” a new European 5G initiative.

Ironically, given the amount of present argument advanced about the need for maintaining “best effort only” access (no packet prioritization), the 5G PPP document also notes the “future challenge will be to guarantee and continuously improve customer experience offered by cloud-based services.”

“Such experience relies on the end-to-end QoS, and more generally on respective SLAs in place for a given service,” the document notes.

So there, once again, you have the inherent tension between “best effort only” access and “quality of service,” which in the 5G PPP document explicitly indicates that QoS mechanisms are necessary to ensure good end user experience.

There are, to be sure, many ways to enhance experience at the end user level. But “admission control” always has been a feature of public networks that must share key resources, and can become congested at peak hours of use.

Among other key 5G objectives is a mobile network with three orders of magnitude more capacity than was typical in 2010.

Another angle is that the 5G PPP envisions devices connecting with multiple networks over time, and possibly more than one network at any moment, meaning there will be more orchestration of access.

Whether that enhances, degrades or is neutral with respect to the “value” of networks, and how such orchestration affects the “commodity access” or “dumb pipe” position of access networks also is unclear.

Though 5G would not be the first next-generation mobile network to enable new apps, 5G arguably will be the first such network built with a specific category of applications in mind.

In some ways more dramatic, at least some observers predict 5G also will erase the distinction between “fixed” and “mobile” networks, with “capabilities and performances of mobile networks becoming similar to those of fixed networks in terms of capacity and services diversity,” argues the 5G “Public Private Partnership”  a new European 5G initiative.

That might sound fanciful, were it not the case that small cells, carrier and other Wi-Fi resources, ideally, will allow devices to interwork seamlessly, erasing, from a user standpoint, the difference between “using a fixed network and using a mobile network.”

Essentially, all those techniques shift bandwidth demand from “mobile” to “fixed” access.

The other change is the deliberate architecting of network standards to support both machine-to-machine apps (Internet of Things) and person-to-person communications.

5G will be about the Internet of Things, argues Neelie Kroes, European Commission VP. If that prediction turns out to be correct, 5G will be the first next-generation mobile network defined by applications, not just air interfaces and bandwidth.

“It will also offer totally new possibilities to connect people, and also things, being cars,

houses, energy infrastructures,” Kroes argues. “All of them at once, wherever you and they are."

One might argue those sorts of comments also are part of a political agenda. Perhaps oddly, the mobile infrastructure business now is lead by European and Chinese firms. So initiatives related to 5G arguably are part of an effort to keep Europe at the forefront of mobile infrastructure businesses in the future.

On the other hand, initiatives such as the 5G “Public Private Partnership”  also speaks to a fear that Europe fell behind in 4G device and application innovation and leadership.

And, as always, the positive impact on economic growth and jobs are part of the rationale for pushing ahead in 5G.

The document also notes why mobile data is at the heart of the proposed 5G architecture.

Within Europe, “revenue from mobile data services compensates for the declines in total spending for both the fixed and mobile voice services markets,” the group says.

T-Mobile US Wants Lower Mobile Data Roaming Costs

In Europe, mobile wholesale voice and data roaming rates have been lowered by action of the European Commission. In the United States, at least according to T-Mobile US, mobile data roaming rates likewise are dropping.

And T-Mobile US wants the Federal Communications Commission to take action to drop mobile data roaming rates T-Mobile US pays to AT&T or other service providers able to support GSM roaming.

To be sure, data roaming represents only about 0.16 percent of T-Mobile US customer data usage.

But smaller service providers typically argue they pay roaming rates that are too high, in large part because smaller networks nearly always pay more in roaming fees than larger networks pay to smaller networks.

Scale is the reason: most calls or instances of roaming will occur when smaller network customers roam onto larger networks, simply because the larger networks represent most of the customers who communicate.

Larger numbers of customers also mean lower likelihood a big network’s customers will need to access a roaming network, simply because there is a greater likelihood a called or connected party is “on network.”

AT&T has a bigger deployed network than T-Mobile US. So AT&T customers arguably will need to roam less frequently off the core AT&T network when traveling.

With a smaller network, T-Mobile US customers are more likely to need to roam onto AT&T’s networks when traveling.

Devices a Smartphone Replaces

This is an illustration of all the other devices a smartphone now replaces. source: TG Daily

For Every Public Purpose, There is a Corresponding Private Interest

Who pays for Internet access? Consumers and businesses. 

But advertisers or sponsors might pay on behalf of users of their services. Internet service providers might sponsor use of some applications. 

In some cases, application providers pay, on behalf of their customers. 

But mostly, it is end users who pay all the costs.

And though it is true that there are genuine policy issues surrounding a seemingly-endless list of "network neutrality" instances, there also are important commercial interests.

For access providers, the issue is whether apps that impose disproportionate network costs should help defray the direct costs they impose. 

For application providers, the issue is avoiding such costs, as they would directly affect app provider business models. 

And as the Internet has fragmented, there now are different kinds of Internet domains. The sort people generally are familiar with are Internet service providers who provide mobile or fixed network access. Those "eyeball" networks aggregate end users. 

Content domains are different, especially domains that supply video entertainment or video content. Such domains represent the majority of all demand on access networks. 

To the extent that ISP eyeball networks have to supply additional capacity to support such apps, the costs now are borne exclusively by end users, in the form of higher access fees. 

The issue is whether dual revenue streams will develop that resemble the way much print, TV and audio content is subsidized by advertisers. 

That notion is contentious as a matter of public policy. But the differences also reflect very real business models, and revenue and cost winners and losers in the internet ecosystem. 

As always is the case, for every public purpose there is a corresponding private interest. Proponents never directly say so. But it always is there. 

Which Analogy for ISP Interconnection: Retransmission or Carrier Interconnection?

Netflix and major U.S. ISPs use different metaphors to describe the process of interconnecting Internet domains.



Verizon, AT&T and Comcast, for example, use the analogy of carrier interconnection, where the amount of traffic exchanged determines whether any particular bilateral interconnection is settlement free (roughly equal amounts of traffic exchanged) or requires payment by the network delivering much more traffic than that network is accepting.



Netflix uses a different analogy, that of broadcast TV "retransmission fees," the fees paid by video subscription services to TV broadcasters for the rights to retransmit off-air signals as part of a video subscription.



Whatever one thinks of the reasonablenes of those analogies, there now is a huge traffic imbalance between "eyeball networks" that terminate Internet traffic for consumers, and "content networks" that deliver traffic to eyeball networks, but accept only modest traffic from the eyeball networks back to the content networks.



The reason is simple enough: content networks send video and other content to end users, but generally do not need to accept much upstream traffic from consumers, whose operations are generally confined to ordering a movie to watch or updating a play list.