AT&T Acquisition of DirecTV to be Followed by Order of Magnitude Fiber to Home Deployment Increase

Virtually all decisions taken by the U.S. Federal Communications Commission occur within a clear context of “what is best for the public interest,” even when we do not all agree on how best to protect the public interest.

That context is why all proposals, and all decisions, must be justified on benefits for the public. The coming decision on AT&T’s purchase of DirecTV will fit the mold.

As a result of the approval conditions, “12.5 million customer locations will have access to a

competitive high-speed fiber connection,” said FCC Chairman Tom Wheeler. That is “about 10 times the size of AT&T’s current fiber-to-the-premise deployment, increases the entire nation’s residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve,” said Wheeler.

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“AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections,” a move to help ensure a level playing field for all content services.

“Second, in order to bring greater transparency to interconnection practices, the company will be required to submit all completed interconnection agreements to the Commission, along with regular reports on network performance,” Wheeler said.

“These strong measures will protect consumers, expand high-speed broadband availability, and increase competition,” said Wheeler.

Whether one agrees or disagrees, the point is that all decisions must be justified on benefits for the public, just as all proposals from stakeholders must likewise be so crafted.

Asian Consumers Want Sponsored Data

A survey of 3,500 people across seven Asian countries, including India, China and South Korea found that 62 percent would consider sponsored data packages that provide free access to specific content.

"Content providers, mobile service providers and consumers have been stuck in a no-win situation when it comes to mobile data usage," said Mary Clark, Syniverse CMO. "Consumers want to use more data along with richer mobile engagement, and operators and content providers are missing out on the revenue that this usage could deliver."

Nearly half of respondents (49 percent) said they would be willing to accept coupon offers from data-use sponsors, 42 percent would be willing to accept offers from entertainment businesses, 31 percent from restaurants, bars and cafes and 29 percent from travel firms.

The survey suggests sponsored data plans could significantly affect consumers' content consumption.

Data-intensive content, such as subscription video services (which are currently the most costly services to access), would see increases in usage of 40 percent.

Consumption of subscription-based music services by 25 percent.

Other services expected to see moderate increases include free video services, voice and video calling services over data networks, and online games.

Consumers are most willing to accept sponsorship for reduced or free data costs from entertainment providers, restaurants and travel companies.

Consumers also understand and are willing to accept sponsored messages and advertising in exchange for free access to websites, social networking and video services.

Those findings should not come as a shock. For any desired product, lower prices boost consumption.

Data-intensive content, such as subscription video services (which are currently the most costly services to access), would see increases in usage of 40 percent," Syniverse said.

Sponsored-data packages could, calculates On Device Research, lead to a $6 billion revenue opportunity for mobile operators and their partners--in Asia alone--within the next five years.

"Our analysis shows that the sponsored-data model has the potential to substantially affect consumers' behavior favorably for all parties involved," said Sam Brown, CEO of economists Strategic Economic Engineering Corp (SEEC) who worked with On Device Research to calculate revenue.

Consumers Want Shared Data, Sponsored Data Plans

Even if many policy advocates want to ban sponsored data plans, consumers overwhelmingly suggest they like such policies.

A survey conducted by Citrix confirms the pattern. Many subscribers worry about exceeding their data caps. They therefore are are quite open to sponsored data plans.

Usage of many apps would increase significantly, if users did not have to worry about the amount of data consumed.

Some 82 percent of survey respondents fear the data usage impact of mobile apps on their monthly data limit and have avoided using an app because of that fear.  

Fully 67 percent of those who watch at least one mobile video per month say they have exceeded their monthly data limit.

Adults with children say they use more data than those without children. Some 72 percent of parents believe they exceed monthly limits, while only 46 percent of childless adults say they exceed them.

The survey suggests subscribers will use more data services if they’re offered through a data plan sponsored by a content provider.

Fully 71 percent of men and 62 percent of women would engage more if sponsored data plans were available.  

Specifically, subscribers would access bank account info (39 percent), watch educational videos (33 percent), watch advertisements (28 percent), hold a teleconference (21 percent) or file an insurance claim (18 percent).

source: Citrix

source: Citrix

Growing mobile data consumption is a given, but retail service plans matter. And sponsored data is among the tools ISPs have available to boost app usage, in addition to lower prices and shared data plans.

Global mobile data traffic is set to reach 52 million terabytes (TB) in 2015, an increase of 59 percent from 2014, according to Jessica Ekholm, Gartner research director, with 3G and 4G connections growing globally from 3.8 billion in 2015 to 5.1 billion in 2018.

By 2018, mobile data consumption will reach 173 million TB.

"Mobile data traffic is soaring worldwide, more than tripling by 2018," said Ekholm.

Ekholm pointed out that retail data plans directly affect user behavior. German consumers, for example, are less likely to watch videos or consume large amounts of mobile data, compared to consumers in the United States, where data plans tend to be  larger.

When asked if they would wait until they get to a Wi-Fi area to download an app or stream content from a video app, 54 percent of Germans agreed and only 36 percent of U.S. respondents said yes.

Some 43 percent of U.S. users felt unconstrained by their data plans , while just 20 percent of German users felt the same, Ekholm said.

That is likely to change, as video usage, as a percentage of total data usage, will rise from 50 percent in 2015 to 60 percent by 2018.

Ekholm said video optimization and content delivery networks, caching content closer to the consumer, would help. But contract plans that single out video traffic to allow users to reach a certain level--without touching their contract data cap--will increase usage and revenue.

That latter practice, of course, would be viewed as an impermissible violation of “network neutrality” rules in some markets, where sponsored data or free access to some apps is not allowed.

Some would say that is the problem with network neutrality rules that extend too far beyond ensuring that all lawful apps are accessible, directly affecting ISP ability to create features and plans that allow widespread sampling of the Internet or optimized performance of some apps (video, especially) that are highly bandwidth intensive.

Ekholm also noted that retail service plans directly affect usage in ways beyond the size of usage buckets. Families with children are driving mobile video usage, and one notable finding made by Gartner in a recent survey was that users on shared data plans--at any income levels--are “least concerned” about streaming video usage on their mobile data plans.

Ekholm attributed that behavior to the ability to share data across multiple devices on a single account.

Others might note that such relatively unconstrained behavior results because shared data plans effectively offer protection from overage charges as well as lowering the overall cost per bit of mobile data.

In the U.S. market, 47 percent of users 45 to 54 stream 15 minutes or more of mobile video apps over mobile networks per session.

About 40 percent users 18 to 24 stream more than 15 minutes per session. That is the impace of Netflix viewing on mobile devices, Ekholm noted.

There is a very small difference between the percentage of U.S. smartphone users that use YouTube "less than five minutes" and "30 minutes or more," she said.

"The evidence is that once customers commit to a larger plan, their usage habits change significantly, resulting in longer-term revenue benefits” for mobile service providers, Ekholm said.

India Dept. of Communications R&D Unit Unveils Solar-Powered Wi-Fi Hotspots and Trunking

Signal trunking systems using Wi-Fi protools and solar-powered Wi-Fi hotspots are among innovations developed by the Centre for Development of Telematics in India. C-DoT is a research arm of the Department of Communications. 

India will have 236 million mobile Internet users by 2016 and 314 million by 2017, according to a report by KPMG produced on behalf of the Internet and Mobile Association of India.

India also will have over 500 million total Internet users by 2017. In June 2015, there were more than 350 million Indian Internet users.

The 3G user base in India is projected to grow at a CAGR of 61.3 percent compound annual growth rate  from 2013 to 2017. 

There were approximately 82 million 3G subscribers in India at the end of 2014 and will reach 284 million by end of year 2017.

Reliance Communications Deploys 5 New Cloud Nodes in India

Reliance Communications (RCOM) has deployed Cloud Xchange (Cloud X) nodes in Delhi, Mumbai, Chennai, Bangalore and Hyderabad.

“These Cloud Xchange nodes can help government departments access 240 times the amount of compute power currently available in government data centers, and over six times the high speed storage currently available in India, said Reliance Group Chairman Anil Dhirubhai Ambani.

The Cloud X nodes are designed to support cloud networking and orchestration,  including self-provisioning of network resources and bandwidth-on-demand.  

That means infrastructure provisioning in a few clicks, as well as deployment of complex multi-tiered enterprise applications directly on enterprise networks in minutes, rather than months.

“The network must now undergo a profound transformation, from a static entity, to a dynamic, intelligent, application-aware fabric that can support multiple traffic requirements, diverse geographies and flexible pricing models,” said Bill Barney, Reliance Communications (Enterprise) and Global Cloud Xchange CEO.

The Reliance Group today is India's largest provider of data center facilities, with a total capacity of over 600,000 square feet spread across the country and 11 data centers.

Zero is a Compelling Price

As many have noted, across many products and industries, zero is a very compelling price. As many also have noted, government regulators can create, destroy and modify whole industries, while helping or harming specific actors within industries, by essentially mandating zero prices.

In the case of spectrum auctions, the very availability of spectrum creates the foundation for business models. But rules about “who can bid” also affect market entry and potential market shares.

Spectrum set-asides or discounts further shape the potential fortunes of some contestants.

Many would argue the recent classification of Internet access services as common carrier services will have direct and indirect impact on Internet access and telecommunication markets and market structure, as well.

For Netflix and other content delivery domains, one direct implication seems to be that domain interconnection costs have been affected.

Though the contract details have not been made public, it would appear that traditional common carrier practices about network interconnection, which are based on amount of traffic exchanged, now have been pushed further in the direction of settlement-free peering, irrespective of traffic flows.

Paradoxically, some might argue, we now have the worst of all worlds, The best of all worlds, from a supplier perspective, is a de facto monopoly in a de jure non-regulated framework.

Conversely, the worst of all worlds, for some suppliers, is monopoly regulation in a competitive framework (de facto price controls in open markets).

Cable TV companies once were clear examples of the former, common carrier regulation of Internet access an example of the latter.

Implicitly, mandatory interconnection of Internet domains irrespective of traffic exchange volumes also provides structural business advantage for content delivery domains at the expense of customer-aggregation domains (consumer ISPs).

Government regulators often have logical reasons for tilting regulations in favor of some industry segments, protecting some segments or encouraging other segments while essentially penalizing other segments.

That might be a growing pattern in some countries which believe they can foster their domestic content and app industries by essentially restructuring business costs within the Internet ecosystem.

Mandatory interconnection really is not the issue. Divorcing interconnection from direct cost structures might be the big issue.

Verizon Adds Symmetrical 100 Mbps Tier to 25, 50, 75, 150 nnd 500 Mbps Options for Internet Access

Verizon now is selling symmetrical 100 megabits per second FiOS Internet access in New York City, Long Island, the northern suburbs and northern New Jersey.

Verizon says it is the only communications provider to offer a symmetrical 100 Mbps service in the New York metro area.

Verizon already sells symmetrical 75 Mbps and symmetrical 150 Mbps services.

The standalone 100 Mbps FiOS Internet service costs $54.99. Double-play and triple-play offers offer further savings.

When purchased as part of a triple-play bundle, the service initially costs $89.99 with a two-year price guarantee and without signing a contract. After two years the bundle price increases by $20 a month.

Triple-play bundles featuring the 150 Mbps symmetrical service sell for  $99.99 monthly. That bundle also includes a two-year price guarantee and does not require a contract.

In addition to the new 100 Mbps tier, Verizon also sells symmetrical access at  25, 50, 75,150, 300 and 500 Mbps.

Verizon also recently introduced the 100/100 mbps FiOS Internet option in the Southern California market.