FCC Wants Information on Binge On, Comcast Stream TV and AT&T Sponsored Data Programs

As it said it would, the Federal Communications Commission is asking some leading U.S. Internet service providers for information about programs that provide access to apps without incurring usage charges on a data plan.

Letters asking ISPs to share information about their programs have been sent to AT&T, Comcast and T-Mobile.

"As you may be aware, concerns have been expressed about these programs, for example, some have argued that sponsored data unfairly advantages incumbent content providers," the letter to AT&T said. "We want to ensure that we have all the facts to understand how these services relate to the commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources."

The T-Mobile US "Binge On" policy that does not count some digital video services against data limits.

Comcast’s "Stream TV" does not count usage against data caps.

AT&T has a "sponsored data plan" programs that allow content providers to subsidize users' wireless data.

Some view any business practices that allow third parties to underwrite data consumption, or carrier programs to exempt video and audio traffic from data usage charges, as violations of network neutrality. Others disagree.

The T-Mobile US program is open to all music or video providers. So the issue is whether exempting a whole class of apps from data charges is a violation of network neutrality rules.

Others see sponsored data as a business practice no different than toll-free calling or ad-supported TV and radio.  

Comcast’s service appears to be a “managed service,” exempt from network neutrality rules, some would argue.

Project Loon Promised Help by Indian Telecom Minister

Though some government agencies have issues with Google’s Project Loon, Ravi Shankar Prasad, India’s minister for telecom and IT said that the government was in principle agreeable to pilots of Google's Project Loon.

Prasad also said he had also proposed a partnership with state run BSNL for Project Loon, which proposes a fleet of steerable balloons as a backhaul mechanism for mobile networks using the Long Term Evolution 4G protocol.

A few ministries--defense, home and civil aviation and the Department of Telecommunications have raised technical and security concerns over the project.

One of the primary concerns with the proposal is that the spectrum band required for the transmission a band between 700 to 900 MHz is occupied by telecom service providers and is currently unavailable. But security is another concern.

Prasad said the government would help Google in obtaining clearances from civil aviation and the defense ministries.

45% of Millennials Do Not Buy Linear TV

It is bad news when 45 percent of potential customers do not want to buy one of three core consumer communications or entertainment products, as the latest survey from Limelight Networks suggests. Though 55 percent of surveyed Millennials say they do buy linear video TV, that also means 45 percent do not buy.

That is an issue for all triple-play providers, but especially for cable TV and satellite TV firms, who have most of the market share.

Price is an issue for many Millennials, as it is for most other demographic groups. Or, perhaps it is fair to say, price is an issue because value is challenged. The single greatest reason for disconnecting was “higher prices,” as you would expect. About 35 percent of subscribers said higher prices would cause them to consider disconnecting.

Some 19 percent suggested the ability to watch the channels they want online would be the reason for cancelling service. About 11 percent seem to be waiting for sports and live events to be available online.

Almost five percent say they would quit buying linear service when they are able to get all the channels they want over the air, using a TV antenna. Since that is not going to happen, we can discount the responses, and assume the key issue for such respondents is “no incremental cost.”

They seem to prefer paying nothing extra to watch all the channels they prefer, but that is not going to happen.

One issue that cannot be assessed is how typical spending might change, over time, as over the top streaming services proliferate and much content is available from a few dominant distributors.

What is unlikely to happen is that one single provider has content rights to “everything” a consumer might wish to watch. That will mean it is uncertain how spending might change, as consumers will have to buy more than one subscription, in all likelihood, to get most of what they want to view.

Some mix of “skinny bundles,” plus use of over the top subscription services, is likely to be the intermediate pattern for many consumers. More than 40 percent of Millennials, and 34 percent of all other consumers, already buy an OTT streaming service.  

source: Limelight Networks

source: Limelight Networks

What a Small Looks Like, Commercially Deployed

A real-world Verizon Wireless small cell in San Francisco. Interesting since there is controversy in my own neighborhood about deployment of a new cell site, not sure whether it is a macrocell or a small cell. Doubt the fuss is about a small cell deployment.

source: RCR

Average Speed Globally is 5.1 Mbps; Does Not Matter So Much

“Averages” do not always mean too much where it comes to the Internet. Though the global average access speed is 5.1 Mbps, according to Akamai, speeds in India average 2.5 Mbps.

In Singapore, the average speed is 137 Mbps.

In the Philippines, speeds average 2.8 Mbps; in Indonesia three Mbps; in Vietnam 3.4 Mbps.

All of that makes the concept of "average" a bit like having one foot in boiling water, one foot in nearly-freezing water. "On average" temperature means very little.

Keep in mind that the platform used also makes a difference, as access speeds usually are higher on fixed networks than on mobile networks, and most consumers in Asia who use the Internet do so on a mobile device. In addition, most mobile networks in much of Asia are of the 2G or 3G variety, not yet 4G.

Beyond such differences, speeds tend to be lower, or non-existent, in rural areas. Though the cost disparities are lesser, where it comes to mobile, compared to fixed networks, the gap remains.

In the United Kingdom, for example, the percentage of homes not able to buy a 10-Mbps service rises as density falls. In other words, more rural areas get lower speeds. The more rural, the lower the typical speed.

source: thinkbroadband

The reason is largely the cost of infrastructure, which is both more extensive, and yet also serving fewer customers per unit of investment. In other words, an ISP has to spend more, burt earns less.

In fact, in most very-rural areas, it might be impossible to earn an actual return. The difference in a business model can be transfer payments and universal service support.

In contrast, where density is very high, the business case is best, or close to best. “Average” is a squishy concept, where it comes to Internet access.

source: FCC

Like it or Not, Future of Competitive Business Services is Based on Facilities

It will not come as any surprise that competitive access services providers argue incumbent telcos still have market power. That is the argument that motivates the Federal Communications Commission to protect wholesale access for firms with little to no willingness or ability to build their own access facilities.

Since roughly 2002, though, the FCC has made clear its preference for facilities-based competition in the local loop, something cable TV companies, Google Fiber and now a growing number of independent Internet service providers are doing, especially in the arguably harder business case of consumer customers.

Some ISPs serving enterprise customers in urban cores use wireless access rather than digging trenches, so that provides yet another model for investment in access facilities.

Some have estimated that Google Fiber’s first gigabit access network in Kansas City (Missouri and Kansas) cost about $563 per location. With more experience, Google Fiber undoubtedly will drive those costs lower.  

Customer acquisition and customer premises add more costs, but you get the point: building gigabit Internet access plant using fiber to the location does not cost as much as it used to.

Not every service provider--in fact, very few, historically--wants to build such plant. There are many reasons, among them the danger of creating stranded assets if a customer disconnects. In cases where a customer account lifecycle is three years, that is a problem.

In other cases, capital cannot easily be raised to do so. And while enterprises often are very happy to buy gigabit IP connections, many smaller businesses still buy legacy T1 and DS3 connections.

In fact, cable TV operators are gearing up for a major assault on enterprise and mid-size business customers, proving that a facilities-based approach is possible. It just is not possible for every contender in a market.

Cable TV firms have been aggressively targeting the small and medium-sized business with growing success, and generating at least $10 billion in revenue annually and growing in excess of 20 percent annually.

Enterprise services are the next big evolution.

Not all business models, consumer or business-focused, work forever. The FCC wants facilities-based competition. Not every contestant will benefit. But a growing number of initiatives by facilities-based providers show what can be done.

Across Southeast Asia, Mobile Data is the Incremental Revenue Opportunity

source: Ericsson

Between 2015 and 2021, mobile subscriptions will grow at a compound annual growth rate (CAGR) of four percent, reaching around 1.3 billion subscriptions by the end of the period. 

The reason for the moderate rate of growth is that adoption across most of the region already is at 100 percent.

In practice, that tends to mean use by people ranges far upwards of 50 percent, as many customers use multiple accounts multiple subscriber identity modules.

That rather slow rate of growth attests to widespread mobile usage across the region.

Revenue growth, on the other hand, is going to come from incremental sales of mobile Internet subscriptions, even if room remains for adding new accounts.

Mature markets such as Australia and Singapore, where LTE is widely available, have a very high mobile broadband penetration, already exceeding 90 percent.

Developing market mobile Internet penetration is 25 percent. That, obviously, is where the revenue growth opportunity lies.

source: Wearesocial.net