FCC to Auction 65 MHz of Shared Spectrum for 4G

The Federal Communications has moved to free up about 65 MHz of Spectrum on a shared basis for use by Long Term Evolution 4G networks, and the key element might be the face that the spectrum to be put up for auction using "flexible use" rules for the AWS-3 band, which includes the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands. 



The novelty here is that the licenses will not necessarily be sold on an “exclusive basis.” The new band, called Advanced Wireless Services-3 (AWS-3), would be the first shared band between commercial networks and government systems.



That way of allocating spectrum is quite new, as in the past all spectrum has been awarded either on an exclusive basis, or, in the case of Wi-Fi, on an open basis with no interference protection.



The new mode of sharing will likely allow licensees and others to share a given block of spectrum, with interference protections.



That's new.

100 MHz of New Wi-Fi Spectrum Authorized at 5GHz

The Federal Communications Commission has moved to make 100 MHz of spectrum in the 5-GHz (5.150-5.250 GHz) band available for Wi-Fi or other uses. The move will increase the total amount of U.S. Wi-Fi spectrum by about 15 percent, some reckon. 

The rules adopted today remove the current restriction on indoor-only use and increase the permissible power.

That will  be useful for creation of Wi-Fi hot spots at such as airports and convention centers.

The move was expected. 

Content Fragmentation, Not Technology, is Barrier to Widespread Video Streaming

Content fragmentation caused by content rights agreements and release windows is among the non-technical reasons widespread video streaming replicating linear video content offerings is taking so long to reach commercial status.

Technology, as such, no longer is the issue. Instead, it is content rights that are the key barrier. It isn’t so much theatrical release, airline or hotel pay per view or release to retail sales that are the issue.

People sort of understand there is a rolling series of release windows for new movie content, and the process is relatively linear and straightforward, up to the point that the “premium” networks get their first access.

Viewers understand that movies debut in theaters, then move at some point to limited hotel and airline pay per view before their general availability on Blu-ray, DVD and digital services.

But then there is what some might call a hiccup. After about a year after theatrical release, movies can be shown on networks such as HBO, Starz and Epix.

But contracts specify that while a movie is licensed to run on such a channel, it cannot be viewed on any other channel, or on a rival streaming service.

In total, it takes five to seven years for all restrictions to expire, and any movie can be shown on any streaming services that wishes to buy the rights to do so. And HBO alone has rights to about half of all the movies released by major studios in the United States until beyond 2020.

So no streaming service can offer its subscribers “all movies.” That fragmentation will limit streaming growth for quite some time, forcing consumers to buy multiple services to get “most” video content after theatrical release.

In addition to those issues, streaming services themselves work to get exclusivity, as well. In other words, a viewer’s desire for “one service that has everything” conflicts with provider effort to gain marketing advantage by offering what no other provider can offer.

Fragmentation is inevitable, under such circumstances. It might not be elegant, but some consumers will simply buy multiple subscriptions, to get access to more content.

Will Facebook Become an ISP?

Precisely what Facebook plans to do with drones is hard to tell, as it once was hard to tell what Google might do in the Internet access area.

But there were more hints, in Google’s case, as Google had invested in a number of Internet service provider initiatives, such as metropolitan Wi-Fi, or airport Wi-Fi, or promises to bid on 4G spectrum (to put a floor under the bidding prices) to actual investments in spectrum (Clearwire).

Up to this point, Facebook has introduced “zero rating” programs in a couple of countries, allowing people to use Facebook without consuming any of their mobile data allotment.

“In just a few months, we helped double the number of people using mobile data on Globe’s network and grew their subscribers by 25 percent,” said Mark Zuckerberg, Facebook CEO. “In Paraguay, by working with TIGO we were able to grow the number of people using the internet by 50 percent over the course of the partnership and increase daily data usage by more than 50 percent.”

Facebook promises other such partnerships will be launched. But not only partnerships, perhaps. “But partnerships are only part of the solution,” Zuckerberg says. To be sure, that is the sort of statement easy to take out of context.

In context, Zuckerberg only is saying Facebook will work to develop new Internet access methods. “To connect everyone in the world, we also need to invent new technologies that can solve some of the physical barriers to connectivity,” said Zuckerberg.

That only suggests Facebook will look to create new forms of access, not necessarily that Facebook will become the access provider.

Already, Facebook says it is working on mesh networks for cities, drones for medium-density areas and satellites for low-density areas. Since Facebook acknowledge that prices are mostly the issue in 80 percent to 90 percent of cases, including all urban areas, one might ask why Facebook is working urban area coverage at all.

In medium-density areas, where drones might be used, Facebook could in principle simply license or promote such technology to other ISPs. But what if other ISPs refuse? What if other ISPs move too slowly?

As for satellite access, Facebook notes that it is expensive to launch and use satellites, but getting cheaper. Facebook says it is looking at both low earth orbit and geostationary approaches, with free space optics.

“One major advantage of aerial connectivity, however, is that deployment to people’s homes is

relatively simple,” says Zuckerberg. “Relatively cheap devices already exist that can receive signals from the sky and broadcast Wi-Fi to mobile phones.”

Facebook might at the moment prefer only to push the Internet access process faster by commercializing new access networks. But the act of creation can change the realm of possibility. What might not have been viewed as desirable, initially, might look quite reasonable, in the end.

And, in any case, what actor would want to broadcast its intentions in such a matter? What advantage would Google have gained had it said “we are going to become Internet service providers?

Sure, it always is possible Facebook will create some new access platforms, and then simply encourage others to use them. But that seems only one of a few likely scenarios. And one of those scenarios includes Facebook becoming a supplier of end user Internet access.

Perhaps Half of High-Speed Access Consumers Would Pay for "Assured" Speed

A poll of U.K. high speed access consumers contains what is probably good news and bad news for Internet service providers who believe quality-assured speeds would be attractive for their consumers, compared to today's more uncertain offers, where, for a variety of reasons, all an ISP can say is that speeds "up to X" are possible.



It all depends on how many other users are on the network at once, and what they are doing. 



The new poll by Think Broadband suggests that perhaps half of consumers might be interested in a speed guarantee, and would pay something extra for such guarantees.



The perhaps not so good news is that those who said they would be willing to pay also indicated they would spend about $5 to $8 a month for the feature. To be sure, a price premium of that sort would be helpful for ISPs, even if it were to be a feature purchased only by 20 percent of consumers. 



The other problem, of course, is that even when an ISP can control contention on its own access links, it cannot do so for the rest of the ecosystem. That means such an offer would have some caveats and limitations that might make the offer less appealing. 



The other issue is whether an ISP can even explain, to most consumers, why an offer is conditional, and what the speed guarantee actually provides. 

Amazon to Launch Ad-Supported Video Streaming Service?

It appears Amazon is considering launching an ad-supported streaming video service, a move that would complement its Amazon Prime service, and provide another source of content for the expected Amazon video streaming dongle Amazon might launch in April 2014.

That device will compete with the Apple TV, Google Chromecast and Roku boxes.

Consumer Satisfaction With Fixed Network Services Creates Opportunity for Attackers

U.S. consumers appear to have wide differences in “satisfaction” with triple-play services they buy from some service providers, compared to others, according to Consumer Reports. Polling 81,848 customers of fixed network services, Consumer Reports found Verizon's FiOS was near the top of the rankings in every category, while AT&T Inc.'s U-verse was in the middle.

Comcast's TV service ranked 15th out of 17 providers, while Time Warner Cable's was 16th.

Comcast and Time Warner Cable also were in the bottom half of phone and Internet service providers and among the 14 firms selling triple-play services, according to Bloomberg.

Though Verizon executives might be pleased, the industry as a whole ranks at or quite close to the bottom in consumer satisfaction among all industries. Of 43 industries tracked by the American Consumer Satisfaction Index, for example, Internet service providers rank 43rd.

Linear video service providers rank 41st. Even mobile service providers ranked no better than 39 out of 43.

The best-scoring industry were the TV and credit union industries, both scoring 85, while the ISP industry scored 65.

To be sure, “customer satisfaction” is not a foolproof proxy for “loyalty.” In many cases, “unhappy” customers will not change suppliers. In other cases, even “happy” consumers will churn.

You can probably imagine instances where even unhappy customers will not change suppliers. They might believe all the suppliers are roughly the same. On the other hand, you can probably imagine scenarios where even happy customers will change providers, as when one provider offers the “same quality at a lower price.”

But there are signs executives should be concerned. For starters, as Verizon’s performance shows, consumers are capable of perceiving quality differences that result in higher satisfaction.

To the extent that higher satisfaction is related to lower churn, satisfaction will matter.

The other issue is that “value” appears to be a growing source of pain for subscribers to linear video entertainment packages, and “prices” would seem to be part of the reason for the dissatisfaction.

One might surmise that other issues, such as slow speeds and congestion, as well as outages, account for the low satisfaction scores for ISPs.

But value related to price is likely a bigger issue for linear video subscription services.

If the average monthly cost of a triple-play bundle is $154, then the annual cost is $1,848, more than the average household spends on clothing, furniture, or electricity, according to Consumer Reports.

Given that “value” is a big issue, bundles that save money should help. They do, but even buyers of bundles seem “unimpressed with what they were getting for their money,” Consumer Reports says.

“Even WOW and Verizon FiOS, which got high marks for service satisfaction, rated middling or lower for value, and out of 14 providers, nine got the lowest possible value rating,” says Consumer Reports.

To be sure, some industries just have a harder time in the “customer satisfaction” area. Airlines and fixed line communications and video entertainment providers traditionally do not score high in consumer satisfaction surveys. The fact that both those industries are susceptible to service interruptions might explain the ratings.

To be sure, outages are certain to cause unhappiness. In the case of high speed access, slowdowns caused by congestion likewise are going to reduce satisfaction with the product.

If high speed access and video entertainment are the foundations for tomorrow’s fixed network revenue streams, such unhappiness is a danger. To be sure, most linear video service providers now operate much more consistently, with fewer outages, than in the past.

And one might argue that the more-reliable performance has lead to higher satisfaction, something that seems to be true especially for satellite video providers and Verizon’s fiber to home service.

Perhaps oddly, ISPs scored lower than fixed line voice providers for satisfaction. One reason for that finding might well be that unhappy fixed network voice customers already have left, while remaining customers are using the service less and less.

Also, users of fixed line voice services might not be as aware of outages as they are with video services.

A television user might have the service in use five to seven hours a day, and certainly will know immediately if there is an outage.

In contrast, a fixed network voice user might experience many outages, but never know.

Still, the potential dangers for incumbent triple-play providers is obvious.

If consumers consistently are dissatisfied with linear video services and even high speed access, and if the fixed network business is built on those two services, then the danger of new competitors entering the market is high.

Almost nothing is more attractive for a would-be entrepreneur than large markets with high gross revenues, served by competitors who are disliked to a great extent by their customers.

Google Fiber represents the realization of the threat in the high speed access business, while steaming video represents the danger to the linear video business.