India Net Neutrality Rules Hang in the Balance

There seems to be a growing sense on the part of India regulatory officials that current application “zero rating” plans of two types violate the “spirit” of network neutrality principles, though some might suggest a final ruling is unlikely in the near term.

And the issues has become a major political issue, apparently. In fact, some might legitimately argue that India has become the current center of struggle over net neutrality policy.

Ironically, one unintended consequence of strong net neutrality rules that prohibit zero rating is that Internet adoption could be slowed and innovation thwarted.

The Progressive Policy Institute argues that bans on quality of service mechanisms, including zero rating, undermine innovation for real-time applications like telemedicine and high definition voice.

Many would argue that offering subsidized access to key apps is a proven and effective way to acquaint non-users with the value of Internet access and apps. That has proven to be the case in the Philippines and elsewhere where Internet.org has tested the concept.

Potential low-income users also suffer when subsidies such as zero rating are outlawed, the Progressive Policy Institute argues.

Still, the India Department of Telecommunications is said to have a "strong view" that 'Airtel Zero' and 'Internet.org' plans--which operate differently--do not follow net neutrality principles.

It is a horrendously complicated matter, one might well argue, and might not be resolved soon. The emerging “strong view” also is said to be “preliminary.”

“Any final decision regarding the two services will be taken only once the expert committee of the ministry submits its recommendations on the entire gamut of issues related to net neutrality,” one source says.

Further key input on network neutrality rules also are necessary and likely to take some time, as there is a change of Telecom Regulatory Authority of India leadership underway.

TRAI Chairman Rahul Khullar is leaving office and a new chair will likely need some time to develop a “detailed understanding” of an issue that is highly contentious and complicated.

So a delay of TRAI recommendations is expected.

The government is said to be investigating how other countries, including the United States and European region are dealing with the issue.

"It is a complex issue and all efforts are being undertaken to ensure that any best practices, if they are in place somewhere, are also considered by us," ETTelecom.com reports an official’s comments on the subject.

Airtel Zero might be considered the more controversial of the programs, though it is a well established concept in retailing.

Under the Airtel Zero program, application providers can subsidize data charges when Airtel customers use their apps.

The principle is similar to the notion of “toll free calling,” where a business pays for long distance calls made by its prospects, customers and partners. The “800” number is a good example.

Internet.org is different. Under that program, any app provider, without paying any money to anybody--not the mobile service provider and not Internet.org--is offered free of charge to users, who do not have to buy a data plan.

The intent is to allow consumers who do not use the Internet to sample key apps and learn the value of the Internet. Any app provider can apply to be part of Internet.org.

But some object to Internet.org principles that apps need to be optimized for low-bandwidth connections.

Many who have experienced similar low-bandwidth situations can understand the performance challenges and the value of optimizing apps for better performance under challenging conditions.

Indeed, “better performance” is a recurring concern. It is why Google Fiber was launched, for example.

So one might hope the examination of network neutrality both thoughtful and detailed. The issue is horrendously complex, has many subtleties and might have direct bearing on how fast demand for Internet access is stimulated, in India and elsewhere.

Moore's Law Comes to the Satellite Business in a Big Way

In consumer or business technology markets, Moore’s Law matters. Over the past decade, consumer applications also have been leading and driving business technology, a vast change from typical adoption patterns before the Internet.

Now consumer electronics dynamics, especially consumer market manufacturing volumes, are creating new economics for satellite services, according to

Vern Fotheringham, LeoSat CEO.

Because of relentless advances in chip-layer processing, memory and integration, the costs of satellite bandwidth and communication are falling significantly, allowing new economics, Fotheringham says.

“As you look at the migration to low earth orbit, small satellites and consumer grade microprocessors can be applied to the space segment,” says Fotheringham.

One example: where “hardened” platforms always were essential for satellites expected to orbit for 15 years without failing or any ability to roll a truck to fix something that has broken, now massive redundancy is an alternative approach to reducing risk.

Having huge fleets, and a mesh architecture, really helps, from the standpoint of redundancy, Fotheringham says. “The cost of hardening has changed. Now we can use redundancy, instead.”

And it would be hard to underestimate the impact of ability to use components and systems produced at consumer market volumes.

Also, because the new constellations use much smaller, and much lighter satellites, the cost to build satellites, and the cost to launch them, will drop dramatically as well.

To a reasonable extent, bigger satellite constellations also mean buying more units, instead of single units. That makes possible volume pricing and creates new trade-offs for business planners.

LeoSat, for example,  plans to launch a constellation of small, high-throughput Ka-band spacecraft that will deliver Internet services globally.

The network initially would comprise 80 satellites aimed at fixed and maritime markets by 2019, and grow to around 120 satellites assuming the business grows as expected.

LeoSat was founded by former Schlumberger executives Cliff Anders and Phil Marlar, who knew well enough the challenges and requirements for energy company communications.

For perhaps the first time, Moore’s Law is going to affect satellite communications business models in a significant way.

93% of India Internet Users are Mobile

Fully 93 percent of Indian consumers who use the Internet in October 2014 did so using their mobile phones, according to Deloitte Touche Tohmatsu India.

India had 254 million mobile Internet users as of October 2014, the latest data available. Of these, 235 million accessed the Internet through a mobile handset.

It is not clear how much that could change as new access platforms become available, or as existing rival platforms are extended or upgraded.

One could well argue that most of the market has yet to be gotten, if the assumption is that, eventually, most people will use the Internet. At present, perhaps 15 percent of Indians use the Internet.

Some expect 500 million new users could be added in India by 2017.

Fact It: Dumb Pipe Often is the Fastest Growing Revenue Source

As much as service providers might dislike the idea, consumer Internet access mostly is a “dumb pipe” service.

And since Internet access already is, or soon will be, the revenue growth driver for most service providers, there is no way any service provider can fully avoid being a major “dumb pipe” access provider.

So discussions about the need to avoid “becoming a dumb pipe” are largely pointless. To the extent any service provider supplies Internet access service, it is, by definition, a dumb pipe supplier.

That does not mean the “only” service provided is “dumb pipe” access, but it is a large part of the total revenue stream, and with the exception of entertainment video, is in many markets the only service whose revenue is growing.

By definition, the “access” is to the Internet-based third-party apps people want to use, not access to a managed service created by the access provider.

So even if consumer desire to use third party Internet apps now is--or soon will be--the most-important driver of service provider revenue (all service providers now are Internet service providers), Internet access directly reduces demand for the key managed services provided by incumbents.

“Adoption in wireless data on most occasions globally has resulted in cannibalization of voice and SMS,” says Rajiv Sharma, HSBC Securities and Capital Markets analyst.

That is a direct result of success selling mobile Internet access, one might say.

Airtel, for example,  has seen its revenue from data surge from four percent of mobile services revenue in March 2012 to 17.6 percent in March 2015.

Windstream to Upgrade Access to Gigabit Speeds

Add Windstream to the growing list of U.S. Internet service providers planning or already offering gigabit Internet access to their customers.

"Windstream is going to launch GPON, or 1 Gbps service, to homes that are already fiber-fed enabled," said Windstream CEO Tony Thomas.

Thomas said in the near term, it will launch one market with 1 Gbps this year with the potential to reach five markets.

"We are drawing a line in the sand that says we're going to launch a 1 Gbps market in 2015 and if the team overachieves, we'll launch in five," Thomas said. "I think after that we're going to launch in every one of our markets a 1 Gbps product because in almost every one of our markets where Windstream competes today we deployed fiber."

Comcast Gigabit Pro 2 Gbps Symmetrical Service Launching in Multiple Cites This Summer

Comcast is rolling out its “Gigabit Pro” symmetrical 2-Gbps Internet access service to nearly one million Colorado homes starting in the summer of 2015.

Gigabit Pro also is being added in Oregon and Southwest Washington, Houston and other marktes as well.

Comcast earlier had annouced Gigabit Pro rollouts in Atlanta, cities in California, Chattanooga, Chicago, cities in Florida and Nashville and will roll out to more cities throughout the year, with the objective of making 2-Gbps service available to perhaps 85 percent of all Comcast-served locations.

In addition, Comcast is launching Extreme 250, a new 250 Mbps Internet speed tier for Colorado customers with immediate availability.

The new Gigabit Pro service will be enabled by an overlay “fiber to home” network, while the 1-Gbps service will be supported on Comcast’s hybrid fiber coax network.

Comcast is currently testing DOCSIS 3.1, its solution for 1 Gbps, and plans a national introduction in early 2016.

When fully deployed, DOCSIS 3.1 will mean almost every customer in Comcast’s national footprint will be able to receive gigabit speeds over the existing HFC network.

Wave Broadband Plans $130 Million Expansion

Kirkland, Wash.-based Wave Broadband has raised $130 million to expand its gigabit Internet access services in the Puget Sound region of Washington, possibly to an additional 10,000 locations in downtown Seattle, but also possibly including other areas as well.

If one assumes $2,000 cost per new location, that would entail spending about $20 million. If Wave adds another 1,500 route miles of fiber, at a cost of $20,000 per mile, that implies an investment of $30 million.

Those two elements would account for about $50 million. That suggests Wave will expand in yet other areas.

In the past, Wave has grown by acquisition, so it would be reasonable to assume some of the new capital will be used to acquire assets.

Wave’s current business is 85 percent residential and 15 percent commercial. But that ratio could change, given the targeted move to downtown Seattle. The company says it is seeing commercial business growing 25 percent annually.

The company said it has annual revenue of more than $350 million.