One billion Internet users

This article is interesting. Aggregate statistics, such as those in the article, point to trends and can help us understand the motivation behind current events. For example, user growth is highest in countries such as China and India, while most of the commerce comes from the US. This helps us understand the motivation and the outcome of WSIS.

Technorati Tags:
Internet, statistics, WSIS

The year that was in Telecommunications

In keeping with the season, I decided to summarize some of the major events of the past year in telecommunications. As a review of this blog, which is only four months old, shows, there were many noteworthy events in the past year. To recap:

• The World Summit on the Information Society (WSIS) happened. After much ado, the result was to keep studying Internet governance. The divide between those arguing that nothing needs to be done and those who feel inadequately represented has not effectively been bridged.
  
• Mergers and acquisitions were prominent features of the news. SBC kicked off the sweepstakes by entering into an agreement to purchase AT&T. This eventually triggered a bidding war between Qwest and Verizon for MCI. Verizon eventually prevailed, though not without discontents among MCI shareholders because Qwest's purchase price was higher, though it was clearly the weaker merger partner. SBC ended up taking AT&T's name, leveraging a well known brand.
  
• Amidst all of this consolidation, the large ILECs invested in infrastructure -- fiber to the home to be specific. Over this high speed infrastructure, they hope (and are) offering video as well as high speed Internet. This raises the specter of a "triple" or "quadruple" play ... voice, data, video, mobile. This is what AT&T attempted in the late 1990s by acquiring TCI (cable) and using the FCC unbundling rules for local access. They did not pull off a bundled service offering and ended up having to sell off the pieces. Comcast entered into an agreement with Sprint/Nextel to compete. Are bundled service offerings going to be the best business strategy going forward?
• Not everyone thinks so ... Alltel announced the sale of its wireline (ILEC) business, and Telecom Austria also moved in that direction. So which will it be?
• This might be remembered as the year in which VoIP became mainstream. VoIP traffic was blocked in some places (Israel, Qatar, to name a few). Ebay purchased Skype. Tiny Western Kentucky decided to go VoIP ... I had forecasted this eventuality some five years ago ...
• Content and carriage began coming together in new ways, to the delight of some and the consternation of others. Google began building municipal, in addition to acquiring the rights to some dark fiber. Similarly, Edward Whitacre of SBC (now AT&T) made the news in which he suggested differential pricing for high profile users. This raised the profile of an ongoing discussion about "network neutrality", including an article in Technology Review about a potential redesign of the Internet.
  
• Speaking of carriage, there was a tussle between Level 3 and Cogent over peering. This added fuel to the fire of network neutrality, WSIS, and the power wielded by the large internet backbone providers. This was eventually resolved, even though it did result in some temporary outages for some Cogent customers.
  
• Mobile continues to be an important feature in the telecommunications landscape. Many operators are rolling out 3G services; CDMA 2000-based technologies still have a substantial lead, though most of us expect WCDMA to come on strong in the coming years, as the GSM-based carriers roll out the necessary infrastructure. Will we ever see a single worldwide air interface standard? Maybe with 4G?
  
• Mobile continues to provide a viable alternative to wireline network access for voice. Access lines continue to decline, which is one of the reasons why Alltel (and Telecom Austria) decided to take the actions they did.
  

Technorati Tags:
Telecommunications, wireless, VoIP, Internet, municipal networks, network neutrality

Presentations from Istanbul workshop on VoIP

This website has some presentations from a recent workshop on economic and political aspects of VoIP. A few of these presentations contain useful information, while others are more general.

Technorati Tags:
VoIP, Internet

The Internet Is Broken

Technology Review just released The Internet is Broken (note that this article is in three parts ... follow links within the article for subsequent sections). The article argues for a fundamental redesign of the Internet to support its uses today in an efficient and secure manner. The National Science Foundation is interested in addressing this question in its FIND project. There are two kinds of questions here, technical and economic/political.

The technical questions include: Why is a redesign needed? Wasn't IPv6 supposed to solve the problems addressed in this article? Why can't we continue to evolve the current approach?

To me, the more interesting questions are not technical. They include: How would you get existing users to switch to a new design (note the rather unimpressive adoption IPv6, some ten years after the standard was approved). Given the earlier items on network neutrality, do you believe that a new architecture would address Isenberg's wish list? Do you believe that the current infrastructure providers (AT&T/SBC, Verizon, et.al.) would go along with such an approach? How would a new architecture fare under some of the legislative initiatives underway in Congress?

Technorati Tags:
Internet, Network Neutrality

Mobile phone standards

This topic has come up before on this blog (see this and this). Now Siemens is predicting the demise of CDMA-based standards in favor of GSM. Would US carriers (Verizon and Sprint/Nextel) swap out their 2G infrastructure? What about 3G (in which they have a significant market lead)? I doubt it ...

Technorati Tags:
3G, Wireless, Siemens, GSM, CDMA

Network Neutrality, again

This article on the BusinessWeek website is a re-statement of the concerns around network neutrality (see this earlier post on this, and this one as well). Link Hoewing's remarks in this article cause me to wonder whether the incumbents' differential pricing strategy is a way to compensate for the regulatory asymmetry that is currently benefitting VoIP providers.

Update: Please check out Ray Gifford's analysis of network neutrality. I found it interesting and useful in that it was based on economic analysis than on historical, moral, or other imperatives.

Technorati Tags:
Network Neutrality, Internet, Telecommunications

Telecom Austria restructuring

In this post, I commented on Alltel's restructuring. Please note this article, in which Austria appears to be undertaking a similar restructuring. So, will the "telecom triple/quadruple play" amount to alliances among independent service providers? There are clearly advantages and disadvantages to this ...

On the plus side, it allows operational autonomy and valuation (from an investment perspective). This seems to be behind the Alltel and Telcom Austria actions. This is also what AT&T (prior to the SBC merger) did in the 1990s. On the minus side ... constructing bundled services is more difficult when the members are autonomous. Incentives to defect from the "cartel" can be strong enough to cause it to collapse. We see this with OPEC. There is, by the way, an historical precedent ... AT&T in the 1990s. After assembling all of the elements of a "triple play", they dismantled the project, arguably because they couldn't make bundling work (I have some papers somewhere ...). How easy will it be for fully independent companies to make it work, when AT&T couldn't as a holding company for these units?

There are other questions ... are bundles in the "public interest"? Are consumers better off or worse off? By what measures?

I guess I'll have to visit Tirol this winter to check it out ... ;-)

Technorati Tags:
Telecommunications, Austria,

Telegraph in New Zealand

Being a fan of the early history of telecommunications ... I came across this site that talked about the history of the telegraph in New Zealand. The article mentions a link with Australia ... I wonder how this was negotiated and how the accounting was done. It would be interesting to consider that in light of Internet interconnection agreements!

I will post similar links as I come across them ...

Technorati Tags:
Telegraph, New Zealand

Can Broadband Predict Economic Shifts?

In this article on his blog, Om Malik asked the question in the title. As I commented there, this reminds me of the discussion/debate that took place in the 1980s around the causality of telephone penetration and economic activity. The net result of this debate was fairly inconclusive.

Is this debate at all germane to Om Malik's questions? Does it matter that we discussed telephone technology in the 1980s and broadband technology today? Does it matter that the previous debate was on national development, while Om Malik is interested in transational effects?

Technorati Tags:
Internet, broadband

Telecom and taxation

The USA Today ran this article in which they reported that nine federal courts have ruled a 3 percent federal tax doesn't apply to phone calls that are priced only by how long a person talks -- not by how far the call travels. That means that many cellular phones, Internet phone service, and long distance calls would be exempt from the tax. Taxpayers would be due three years of refunds, or about $9 billion. It seems easier to institute taxes than to repeal them (see this, for another example ...) This follows this a different but related article on tax protesters with regard to the same tax. Politics makes curious bedfellows.

Technorati Tags:
Telecommunications, taxes, wireless, cell phones

Google, Yahoo, Alexa and search

A couple of articles (see this and this, for example) came out yesterday. In this article industry observer and reporter Om Malik considers their implications. Here is Nicholas Carr's take on this development.

Does this foreshadow a restructuring of the search industry? Does this explain (in part) Google's (and, for that matter, Yahoo's) recent activities (i.e., announcements and acquisitions)? If so, how and why do you think so?

Technorati Tags:
Yahoo, Google, Internet, Alexa

Importance of pricing in telecommunications

We tend to get distracted by technologies in trying to explain market events that we sometimes might forget that pricing can play a significant role. This article highlights this, as did the 1989 Telecommunications Policy article by Jill Hills, in which she used the different pricing structures in the US and the UK as a partial explanation as to the differences in telephone penetration between the two countries in the 1980s (and before).

Technorati Tags:
Universal Service, Wireless, Telecommunications

Is Qatar blocking VoIP calls?

This story, which reports that Vonage users in Qatar are being blocked, has been making the rounds on the telecom blogs. Unlike the Israeli policy, which was quite overt, I have not come across an official government statement.

Do you think that governments should be blocking VoIP traffic? If they do, do you think they should do it explicitly or quietly?

Technorati Tags:
Internet, VoIP, Vonage, Qatar

Network Neutrality

David Isenberg posted this article, which amounts to a wish list (or manifesto?) on "network neutrality". In this article, he calls for regulation to ensure that the network remains neutral. I wonder how regulation would be implemented ... specifically:

What would the measurables be? What are appropriate interventions? How would you know if you were successful? Given the recent talk about Google's ambitions (see, for example this post earlier on this blog), would Google be a candidate for this kind of regulation?

Technorati Tags:
Network Neutrality, Internet, Telecommunications, Google

Alltel spins off wireline unit

This article reported today is an indication of the changes happening in the telecommunications industry. It is old news that the number of ILEC access lines has been decreasing in past years, while the number of mobile subscribers has been increasing. This is due in part to competition from mobile carriers and penetration of broadband service (both ILEC and CATV based). This topic has shown up in earlier posts on this blog.

In focussing on rural and suburban areas with its wireline business, Alltel had built a company that was largely immune from (wireline) competition by CLECs that characterized the late 1990s. With competition from wireless carriers and CATV providers, Alltel faced greater competition. Clearly, they felt that maintaining an integrated company was not consistent with shareholder value.

I find this move by Alltel a bit peculiar in that Sprint/Nextel has recently made some noise by allying themselves with CATV providers in support of a "telecom triple play" (also discussed earlier in this blog), and the moves by Verizon and AT&T (aka SBC) in this direction. Further, Alltel does not have the wireless footprint or subscriber base to compete with the big three.

Alltel is clearly marching to the beat of a different drummer ... are they right? What are good rationales for this move?

Technorati Tags:
Alltel, telecommunications, wireless, competition

New book on US Telecommunications

Please note this new book on US telecommunications, co-authored by yours truely. Please excuse this shameless self-promotion! I haven't found it on Amazon.com yet. Happy reading ...

Technorati Tags:
Telecommunications, Telecom policy, Internet,

Yahoo phone service

This article highlights how competition might be arising from unexpected sources for communications companies. The purchase of Skype by Ebay foreshadowed this, as do some of Cringley's speculations (on which I blogged earliers). Many people (besides me) have observed that the distinction between voice messaging (using an instant messenger interface) is indistinguishable in many respects from a basic voice call. This article shows how traditional lines of business are blurring ... here's a quote:

"Historically communications have been stuck in a bunch of different silos," said Brad Garlinghouse, Yahoo vice president of communications products, and a former executive at Dialpad.

"The home phone is one silo, the work phone is a silo, the mobile phone is a silo, instant messaging is another silo and mobile phone text-messaging is another silo," he said of how Yahoo plans eventually to tie together communication services.

Business 2.0 notes that the cost to Yahoo for this new service is probably well below the billions that Ebay paid to purchase Skype. In his blog, Om Malik comments on this as well, posting price estimates -- around $30 per year. Forbes has a an article that is very bullish on Yahoo's prospects in this market.

Do you think network externalities are relevant here? How is this new business model (for Yahoo) different from its previous one (in regard to voice communications)? How successful do you think Yahoo will be in executing the strategy suggested by the Forbes article?

Technorati Tags:
VoIP, Yahoo, Skype, Internet, IM

Microsoft vs. Korea

Earlier, I had blogged about the dispute between Microsoft and South Korea. In that post, I noted that Microsoft was threatening to withdraw. In today's news, it is reported that the South Korean Fair Trade Commission found Microsoft's practices an "abuse of market dominant position and unfair trade practices." A fine of (only) $32 million was levied against Microsoft, along with an order to change its practices by offering two versions of Windows.

So, will Microsoft make good on its threat to withdraw from S. Korea in response? Personally, I doubt it ... the risks are high in a technology-savvy country like Korea.

Technorati Tags:
Microsoft, Korea

Is a Domain Name Property?

The manner in which the ".eu" TLD has been opened was done to honor the rights of pre-existing trademark holders ... or perhaps to avoid disputes. The question remains as to whether such rights actually exist. Milton Mueller, among others, have written about this. This blog post addresses this question, in case you are interested in delving deeper into this question.

Technorati Tags:
Internet, trademarks

The Internet of Things

The ITU just released the latest in its series of reports on the Internet, The Internet of Things. I have only read the executive summary (available on line at no cost) ... as with many reports like this with catchy titles, they don't explain the title (a pet peeve of mine). What is the relevance of a report like this to you? How does this compare to other academic or government reports? Do you expect this report to have an impact? If so, where and why?

Technorati Tags:
ITU, Telecommunications, Internet, WSIS

Infrastructure theft and telecommunications

This article is interesting, in that it highlights an aspect of infrastructure that seldom gets attention -- theft. As the article points out, it is hardly a problem isolated to developing countries. The impact of infrastructure theft is perhaps greater in developing countries because the resources are scarcer.

On the CAnet News mailing list, Bill St. Arnaud speculates about whether this phenomenon might turn out to be a driver for technology change. Would fiber or wireless equipment face the same problems? What if the lampposts being stolen contain access points ... how would this affect municipal networks?

Technorati Tags:
telecommunications

".eu" opens next week

A new top level domain ".eu" opens on 7 December. This press release indicates the protocol ... trade mark holders and public bodies will have first dibs on names for two months, followed by a two month period reserved to holders of "prior rights", before it is open to the public in April. What is the rationale for this approach? What problems is EURid trying to avoid?

Technorati Tags:
Internet, Europe, EU

Price's Law and the Downside of Network Effects

We have discussed network effects from time to time. Here is an interesting article that gives a little more definition to the phenomenon. Price's law appears to be more focussed on content, with more applicability to the "web 2.0" phenomena. Do you think that Price's Law also applys to the network effects experienced in the telecommunications industry? To think this through, take a look at your own consumption behavior where network effects exist (IM, mobile phones, etc.). You might also revisit the historical access competition era in the US (1892-1912). If Price's Law holds in this domain, what implications would that have on policy, especially for developing countries?

Technorati Tags:
Network Externalitiest

More on Google (less off-topic)

Recently, I posted a piece speculating on Google's future plans. This post featured a reference to an article by Robert Cringley. Cringley has now posted this article in which he further speculates on Google's plans (in addition to correcting some errors in his previous piece). Om Malik adds weight to Cringley's speculations in this posting on his blog.

So how does this frame Google's competition (and competitive position)? Does Microsoft's investment in the Xbox make more sense in this context? Who else might have an interest in competing here? What about Whitacre and his recent comments? What kind of future do you think is emerging, based on these (and other) speculations and analyses?

And then there is this ....

Technorati Tags:
Google

Israeli ISPs may not carry int’l calls over VoIP

Take a look at this story. Is it technically feasible for ISPs to enforce this? Do you agree with the reasons for this action that were given by Mr. Balashnikov? Do you think it is right to effectively protect incumbents ("licensed international carriers")?

Technorati Tags:
VoIP

VeriSign, ICANN face antitrust lawsuits

This article is interesting ... what does this say about the experiment of "private regulation" that ICANN embodied? That is, ICANN was an attempt to encourage private sector leadership in the governance of the Internet. Does this governance require a single arbiter of names and addresses? If so, what is the relationship between this function and anti-monopoly laws? Can the two coexist? Does this suggest that governance should be modified, perhaps along the lines suggested by several parties at the recent WSIS meeting?

Technorati Tags:
ICANN, Internet, WSIS

New Public Consultations on the EU Regulatory Framework

Please take note of this announcement on a new series of pulic consultations with regard to the EU Regulatory framework. Why is this consultation being undertaken? What results would you expect from this process? Given what you know, what questions in the consulation document would you be able to answer, and what input would you provide to the EC?

Technorati Tags:
ITelecommunications, Europe, EU

The future of the Internet

In addition to the article referred to earlier on New Zealand, here are two articles that discuss some issues facing the Internet in the future. The first addresses potential abuses by the owners of the so-called "bottleneck facilities" -- the facilities we use to gain access to the content and applications that are provided on the Internet. These "bottleneck facilities" have almost always been the access network. The article goes on to address questions about the proposed legislation that is being discussed in Congress.

The second article points out some possible futures of the Internet and their consequences. In particular, Doc Searles paints three scenarios, one in which the carriers (i.e. Verizon and AT&T) win, one in which municipal networks emerge to form an alternative, and a third in which the Internet community moves toward a future that is outside the context of the traditional content/carrier framework.

To what extent should these concerns and arguments be reflected in a new telecommunications act? Can/should regulations exist that restrict the behavior of the owners of "bottleneck facilities"? If you think so, why do you believe that setting guidelines today would not create regulatory difficulties like those that stimulated the Telecommunications Act of 1996?

Technorati Tags:
Internet, Telecommunications, broadband

Funding for Rural Internet in the US

As a follow-up to our discussion of developing countries, here is an article (free registration required) describing the goals and problems faced by potential users of a program designed to bring broadband Internet to rural areas. While many rural areas in the US hardly qualify as "developing areas" (including the one described here), others might. What are the benefits of using a program such as this one? Could a program like this be implemented effectively outside the US (albeit with different funding agencies)? How would you overcome some of the problems described in the article?

Technorati Tags:
Internet

More on municipal networks

I came across this article on municipal wireless that was published recently. I will try to get ahold of the paper that is referred to, for those of you who what to learn more.

Technorati Tags:
Municipal Networks

Telecom Act re-write

As I have mentioned previously, there are several activities related to a revision of the Telcommunications Act of 1996 in the US. The article "Why Regulate? Lessons from New Zealand" (click on "Regulatory and Policy", below the picture of the helicopter) takes a look at what happened in New Zealand after regulation was abolished in New Zealand. Consider DACA proposal, for example, or the revision of the September draft. How well do you think New Zealand's experience translates to the US? Do you think the DACA proposal or the House staff discussion document reflect New Zealand's experiences?

Technorati Tags:
telecommunications

Universal Service

I came across this article (click on "Regulatory and Policy Issues" in the January 2005 IEEE Communications magazine. It is an excellent overview on this subject. Consider this in light of this article that appeared yesterday and the efforts to re-write the Telecommunications Act of 1996 in the US. How do you think universal service should be funded? How should the funds be distributed? Should schools and libraries be eligible recipients of these funds?

Technorati Tags:
Telecommunications, Universal Service

Digital divide -- focus on Kenya

Much of the rationale for WSIS was to broaden the impact of the information society to developing countries. This article focusses on specific problems faced by Kenya. Keep this in mind as we look at developing contries next week ...

Technorati Tags:
Internet, Telecommunications, Kenya

DSL Market insight

In this article, Om Malik points to the realities of the DSL market in the US. We have a tendency to look toward higher speed access, so it is interesting to get a reality check like this. Does this surprise you?

Technorati tags: Telecommunications, Broadband

Google (off-topic)

This article and its associated comments are interesting. And then, there is Cringley's long article ...

Google seems to be getting into everything these days ... are their motivations altruistic? Should we be worried? If so, what should we worry about?

Technorati tags: Google

Pushing VoIP growth

This article provides some illumination as to one of the prime motivators to VoIP growth. Why would MSOs (i.e. cable companies) be pushing VoIP?

Technorati Tags: VoIP

3G statistics

There were two interesting articles off of the ITU website today. This article from the ITU is interesting ... One thing to pay attention to is the total number of subscribers for each technology type. What are the implications of these data? Do you think that network externalities are a factor here? Do you think this bodes poorly for W-CDMA?

The second article relates to 3G penetration. Note the differences by country in terms of the total number of subscribers and the subscribers per capita. What does this tell you about market potential?

Technorati tags: wireless, cellular, 3G

EC rules on Digital TV Transition

I have brought up the transition to digital television in an earlier posts on this blog (for example, this one. Yesterday, the European Commissionruled Berlin's subsidies to be illegal. In this ruling, they indicate the circumstances under which such subsidies could be considered legal. What implications (if any) might this have for the proposed US approach (remember the WTO)? Would the US plan be considered legal in the EU? What message does this ruling send to Berlin (and other regional government authorities), who wish to be innovative and on the leading edge (remember that Berlin has been widely cited and studied)? Would this affect leadership in municipal networks?

Technorati Tags: Digtial Television, European Union

West Kentucky Goes IP

In several earlier postings, I had suggested the conundrum faced by incumbent LECs, as wireless replaces wireline networks. As this article, also from Om Malik's blog, points out, this is not just a large telco phenomenon. Do you think that this is the start of a trend among ILECs?

Technorati Tags: VoIP

More on GoogleNet

Om Malik, in his blog, posted this news item today. Apparently, Google planning to apply the San Fransisco model to other communities. Note that this proposal was not solicited by the municipality! Does this make a difference to you?

Technorati Tags: Municipal Networks, Google

WGIG Book: Reforming Internet Governance

The WSIS Working Group on Internet Governance will release a book on November 17. I suspect that it will be a worthwhile read for those of you with more interest in this topic. Right now, only limited parts are available (in PDF).

Technorati Tags: WSIS

Kofi Annan Op Ed

UN Secratary-General Kofi Annan had this article in Satuday's Washington Post in which he attempts to defuse concerns about the UN's intentions. Does his argument satisfy you, given what you have learned about WSIS?

Technorati tags: Telecommunications, WSIS

Control of access networks

This article (free registration required) relates to several earlier posts on this blog. First, it explains why an incumbent might want to control the access network. Second, it explains why Google might be motivated to build independent access networks.

May you live in interesting times ....

Technorati tags: Telecommunications, Economics, Google, Municipal Networks

Telecom "Triple Play"

This story reports on a recent deal in Telecom. This speaks to how telecom companies are positioning themselves in the future. How effective do you think a partnership like this will be, compared with the ownership-based strategy being pursued by Verizon and SBC (aka AT&T)? What are the pros and cons of each approach?

Technorati tags: Telecommunications, Economics

Asia-Pacific Region Takes Over Lead in Internet Usage

This article points to recent trends in internet use. It is easy to extrapolate the trends into the future. What impact, if any, does this have on your opinion about the Internet Governance debate at the upcoming WSIS?

Mobile technology and law enforcement

One of the factors associated with advancements in telecommunications technology has been its impact on law enforcement. In the US, the Congress passed the "Communications Assistance for Law Enforcement Act" (CALEA) in the early 1990s to ensure that law enforcement agencies are able to access networks appropriately for wiretaps. This has not been without controversy; see, for instance this site.

Now comes a new technique, called by some "digital door to door". This could be framed as a kind of location service, I suppose. Though I haven't read any reactions yet, I wouldn't be surprised if some industry observers will comment on the loss of privacy.

Do you think that this is an appropriate use of information collected for another purpose? The EU has published privacy rules, which might be at odds with this activity ...

More on Internet governance

This posting provides an interesting historical view of Internet governance, through the lens of interconnection negotiations. If the root zone fragments, don't we face an interconnection problem similar (in some ways) to the the problems faced by the telephone companies (or at least telephone users) in the 1890s in the US?

BW on the SBC/AT&T merger

In this article SBC CEO Edward Whitacre discusses the company's strategy in its acquisition. How does this tie in to the previous post about wireless/wireline substitution and the discussion we had in class last night?

More on Level 3 and Cogent peering

This agreement should end the ongoing saga between Level 3 and Cogent. This gives Cogent the opportunity (and, apparently, the challenge) to continue non-settlement-based peering, while giving Level 3 a contractual assurance if these commitments are not met. In my mind, this is a postive outcome for the principle of privately negotiated interconnection agreements.

Technorati Tags: Internet, Interconnection, Peering

Microsoft threatens to withdraw Windows in S.Korea

This story is a bit off topic for this course. However, it is an interesting study in corporate strategy when network externalities are present. Microsoft, in its previous antitrust suits, has offered settlements with antitrust (i.e.,anti-monopoly, or competition) authorities that included bundling other media players (a settlement rejected by the European Commission). Despite this unfavorable ruling (for Microsoft, which is under appeal), Microsoft has made no statements suggesting a withdrawl from the European market. This threat of withdrawl would threaten to strand many users of Windows in South Korea, which is by many measures at the vanguard of IT use (as we have seen previously). Why would Microsoft do this? Are they bluffing? If not, what risks are they taking? How big do you think these risks are for their long term future?

Technorati tags: Microsoft, South Korea, Network Externalities

Tacit collusion among incumbent carriers?

In class recently I wondered out loud why competition had not emerged among the incumbent wireline carriers. Now this article appears, citing a study by a respected economist (a challenge to you is to find the ex parte referred to in the article), which outlines the incentives for this behavior.

If this is true, what kinds of responses (if any) should their be?

Technorati tags: Telecommunications, Economics

Wireless substitution for wireline service revisited

I blogged about this topic earlier; now comes this article, which reports that 9.4% of wireless subscribers have made wireless their primary phone. The study expects this number to grow to as high as 37% by 2009.

What impact does this have on the (incumbent) wireline carriers? What would your stragegy recommendation going forward be if you worked for such a carrier (as you someday may do)? To help you think this through, it woudl be valueable to consider what your assets are and how you might leverage them in novel ways.

Technorati tags: Telecommunications, Economics, Wireless, Business

Broadband and universal service

Here is an op-ed piece off of CNet. The context for this piece is universal service.

While we have yet to discuss this in depth, some of the main questions with universal service are:

• What is included in the definition of universal service?
  
• Through what mechanisms is universal service achieved? This usually revolves around some kind of subsidy.
  
• Who is eligible to recieve subsidies?
  

How does this article fit in to that framework? How about municipal networks? Do you think that broadband should be part of the universal service package?

Telecommunications, Regulation, Broadband, Universal Service

Location services

Though this is more toward information policy than telecom policy, I was reminded by this article in BusinessWeek of something I had written earlier (in comments) regarding this article:

"This is interesting, thanks for posting it. In areas where traffic density is very low, even anonymity as promised by Missouri would be of much help. A reasonable observer would be able to deduce who is going somewhere if there are only a few residences on a street ...

"On the other hand one could make the case that this is not an unreasonable privacy loss for a public good (basically, echoing Scott McNealy -CEO of Sun- who said something like "You have no privacy anymore. Get over it"). Furthermore, users can always turn their phone off, which would prevent them from being tracked ...

What I would like to point out from the BusinessWeek article is that different cultural values may make a service tenable in one country (or even region) than in another. Can you think of other instances where this has occurred? And where it hasn't? In each case, what were the features that made a technology or service transferrable (or not)?

Technorati Tags: Telecommunications, Wireless

More on IM Interconnection

In this article, Lisa DiCarlo reports on previous history ... in 2003, as part of an antitrust case resolution, AOL and Microsoft agreed to explore the interoperability of their IM systems ... and suggests that the interconnection undertaking is technologically complex. Will it be different this time?

WSJ.com - Telecom

The Wall Street Journal 's Almar Latour reported on Friday (22 October 2005) about the upcoming mergers. As we have already mentioned, the FCC must approve the merger of SBC and AT&T, as well as the merger of Verizon and MCI. Latour writes: "...some critics will assail it as the reincarnation of Ma Bell. But the old phone monopoly is never coming back."

Is he right in this assertion? Why or why not?

Articles in Forbes.com

Check out Coolest Communication Devices Of The Future - Forbes.com. What do you think of the vision(s) embodied in these devices? Do you think that the industry is going in a different direction? That is, do you think there are other devices that Glenn Derene failed to identify that you think will be key in the future?

Also today you can find Scott Woolley's article The Next 4000 Days, in which considers the future in telecommunications in light of the past. This is an interesting adjuct to Friday's WSJ article.

The Transition to Digital Television

I have referred to this transition in an earlier post ... now there is an article and some news of note. This article in IEEE Spectrum is a good overview of the history and the current issues, with a slight technical bent. Then, today's New York Times has this article describing recent legislative action. The bill proposes, somewhat controversially, a US$ 3 billion subsidy program for converter boxes to be paid for by spectrum sales. This idea is similar to one proposed by Tom Hazlett, and mirrors what was done in Berlin (Germany) to support the transition there, the first region in the world to do so.

Is this a reasonable strategy? Should government be involved in this transition, or should it be left to the private sector? What would be the problems of doing the latter, and the risks of doing the former?

Technorati Tags: Telecommunications, Spectrum, Television

E-mail and Endorsement

The news report says:

NCLR has since called Portland's remarks defamatory and "patently false," Claiming the statements were made via school e-mail and therefore endorsed by the university, the group threatened to file suit by as early as today if the remarks aren't detracted.

Portland is the women's basketball coach at Penn State. If she sends an e-mail, does that mean it is endorsed by the University?

To see the complete news article:
http://www.post-gazette.com/pg/05292/591068.stm

WiMax on Taiwan

In this article plans for island-wide WiMax in Taiwan are discussed. Note the level of government funding ... and spectrum allocation. They claim it is a test, but could it be a "municipal network" in disguise? We are getting close to Halloween, after all ...

I wonder what the incumbent carriers who provide broadband have to say about this? This is framed as a industrial policy -- helping Taiwanese notebook manufacturers. To me this adds weight to my growing belief that a strong motivation behind the municipal networks movement is big business ...


Technorati Tags: Telecommunications, Municipal, Wireless

WSIS -- a US Senator weighs in

This story is interesting from a number of standpoints. First, gaining this kind of support certainly bolsters the position of the US delegation to WSIS. I have not been able to find the text of the statement, though I presume that much of the content is in Senator Coleman's press release.

Second, this article provides a concrete example of why some countries feel the need to equalize governance. Notice that the question of the scope of governance is not mentioned in the article, though the Senator's press release begins to address this. It would be a difficult to topic to introduce into the public sphere, but it seems as though doing so is important at this point in the history of the Internet.

Internet Governance (in the broad sense) comes up in many different places, see for example this item. Should a case like this be resolved by an "Internet Governance" body? Would the ITU be an effective venue for this? Should this be a local matter, or should there be a single venue for this kind of dispute resolution?

Also, I came across this blog aggregator in case you want to follow this more closely.

Technorati Tag: WSIS

US Broadband penetration and municipal networks

I came across this post that brought up municipal networks in light of the declining US standing internationally in broadband service penetration. To that end, Jackson West pointed out the distinction between municipal wireless and citywide wireless coverage in connection with the San Fransisco project. Though he does not elaborate on the subject, the distinction he has in mind appears to be that the former are city provided services while the latter are privately provided services throughout a metropolitan area (apparently the model that San Fransisco and Philadelphia are following).

How aggressive should localities be about pushing this kind of service? Should they be providing resources (such as financing, rights of way) for free? Is it appropriate for cities to be biased towards wireless (as they appear to be)? Would you anticipate regulatory favoritism on the part of a city toward its own initiative (whether municipal or not)?

Technorati Tag: Telecommunications, , Municipal

Radio Regulation and the First Amendment

Here is an extremely interesting article in Forbes that highlights the way in which technology creates new problems for traditional regulation. In this case, the article points out that spectrum regulation is on a collision course with the first amendment due to software radios. At this point, this appears to be a US phenomenon only, but will it spread internationally (if successful) through institutions such as WIPO? Do you think that this an appropriate avenue for challenging a regulator's power? Do you think that governments should have the power to regulate (or coordinate) spectrum in spite of a challenge such as this?

Technorati Tag: Telecommunications Regulation

Google Earth and homeland security

I came across this article in Wired. The article points to the downside of Google Earth -- namely that it could be used by potential terrorists to plan attacks. The Indian minister cited in the article felt that developing countries were singled out for high resolution photos.

How does this tie in to the upcoming WSIS? Should an issue such as this be included in the idea of "Internet Governance", as we discussed in class?

AOL in play?

In a followup to the previous post on the Yahoo/MSN IM interconnection, the Business 2.0 blog has this article about possible equity interests by Yahoo, Google, or MSN. Forbes also has an an article today about this topic, though this short article is more about the implications for investors. Wired has an article that picks up on this theme as well, as does the Washington Post in this article.

How (if at all) does this tie in to the Instant Messaging interconnection? Do we see a consolidation happening in Internet search and portals? Is this domain subject to the same economics as infrastructure industries?

RIAA lawsuits against file sharers

Major record labels sue Pitt student, others

Check today's Pitt News to read the latest regarding the Recording Industry Association of America's new lawsuits against file sharers:

http://www.pittnews.com/vnews/display.v/ART/2005/10/17/435330ec191e9

It's been interesting to follow the RIAA as they attempt to stop the sharing of copyrighted music. While recent activity has focused on lawsuits, early attempts included putting messages on user (filesharers) screens stating: "When you break the law, you risk legal penalties. There is a simple way to avoid that risk: DON'T STEAL MUSIC."

Hacking was also addressed: "On July 25, 2002, California representative Howard Berman proposed a bill in Congress which would allow the recording industry to legally hack into systems suspected of sharing copyrighted material." The bill included allowing "disabling, interfering with, blocking, diverting, or otherwise impairing the unauthorized distribution, display, performance, or reproduction of his or her copyrighted work on a publicly accessible peer-to-peer file trading network."

Broadband Wiki

Here is an interesting resource -- along the lines of Wikipedia and Placeopedia. The idea is to construct a site in which the broadband status of places all around the world is documented by people who have some knowledge about that place. Please browse it, and if you see an error, correct it!

Naked DSL and telcom mergers

I want to draw your attention to this article. As you should already know, the FCC is now considering whether to approve the mergers between AT&T/SBC and MCI/Verizon. This points out that some are arguing for "naked DSL" -- that is, DSL without the voice service -- as a way to diminish some of the potential anticompetitive aspects of these mergers. How would this help? Why do you think the firms who are advocating this are doing so? On another note, why is the FCC even involved in this? Antitrust analysis in the US is normally done in the Department of Justice (headed by the US Attorney General).

"Freedom to Connect"

David Isenberg has written this piece in which he connects structural issues in telecommunications to political ones. It is a useful argument to consider as we think about regulation in general. It will be interesting to follow the argument as it develops.

Regulation by Information

This EU website brought to mind a paper I read some years ago by Giandomenico Majone on Regulation by Information. The basic idea is that one of the tools that a regulatory agency has is providing information to the public on items that the regulated firms might try to obscure. Here are some examples.

How does this theory apply to the EU website? What regulatory objectives might the EU have in mind? Is this superior or inferior to price regulation?

Internet Peering

As was noted in this article, there has been a report of a dispute between two large internet backbones on their interconnection agreement. Large internet backbones interconnect by peering, which is a settlement-free interconnection regime. Peering works when the networks have similar scale and scope, which typically results in relatively symmetric traffic flows across the interconnection point. If this traffic is asymmetrical on balance, the larger network typically assumes more of the traffic, hence more of the costs, of a smaller network, and will be discouraged from continuing this relationship. This is what appears to be happening here. In a circumstance like this, a peering relationship becomes a transit relationship, in which the smaller ISP is required to pay fees to the larger. As a I alluded to in an earlier post on this blog, some have speculated Google may be trying to build a large network of the scale and scope that would enable it to peer with the large backbone providers, thereby saving them money.

When we get into international interconnection, some there are some aspects of this that are showing up in the WSIS preparatory documents. What might you imagine these to be?

BW on the next gen DVD format wars

An article in BW Online goes into some detail about the Blu-Ray vs. HD DVD format war that many of you have expressed interest in. This is the most comprehensive discussion that I have read so far. By the way, BW Online allows you to post comments on the article directly, if you feel inclined to do so.

Is this standards war different from others that we have seen in the past? If so, how?

BW on WiMax as a broadband alternative

BusinessWeek has an article about the disruptive potential of WiMax. Some observations that Steve Rosenbush makes are:

• Rural areas can be support WiMax in the 5GHz band
• Urban areas require licensed spectrum in the 3GHz band, much of which is owned by Sprint-Nextel (from its merger)
• Verizon's Seidenberg considers it a niche technology due to spotty availability and improvements in 3G technologies
• Others consider it a technology that could disrupt the established broadband duopoly in the US

Do you think WiMax can succeed where other fixed wireless services failed during the Internet bubble, (eg. Winstar)?

Blogs vs. the law

A blogger was sued in August for defamation and revealing trade secrets. But he isn't going to court for what he said -- but rather, for what readers of his blog posted as comments!

Read about how a "Showdown looms over bloggers and their rights" in today's Pittsburgh Post-Gazette: http://www.post-gazette.com/pg/05277/582101.stm

Economic sustainability of the Internet?

Johnna Till Johnson wrote the following as part of this column:

"Quite simply, it may cost more to operate the Internet backbones than the carriers earn - and running at a negative profit margin, as we all know, eventually results in bankruptcy."

This article is part of a series that she has written (links are in the article), and are quite appropos to the leadup to WSIS. How do governance models affect profitability? Is Google seeking to effectively separate itself by subsidizing an end-to-end network with ad revenues (through GoogleNet)?

Antitrust suit against the "Baby Bells"

Here was an article late yesterday in Forbes.com regarding an antitrust suit. The case is Twombly vs. Bell Atlantic, BellSouth, Qwest, SBC and Verizon. Here is the text of the decision. I have not had a chance to review the case yet. Given the pace at which these cases normally proceed, it is doubtful that we will see any outcome on this anytime soon.

What do you think about the merits of the case? If there is no apparent evidence that the defendants actively tried to deter entrants using their market power, do you think that the mere fact of dominant market share is grounds for a suit like this?

Conversion to HDTV

We haven't discussed this yet in class, but this article provides a good introduction to the topic. It is also an excellent example of how an external event can stimulate the deployment of policy changes. Reallocation like this is painful (to stakeholders) can be painful and difficult. How should a change he made when it isin the public interest that requires real costs on the stakeholders?

WSIS update

Here is an item from today's NY Times (registration required).There continues to be a tug-of-war over the future control over the Internet. At WSIS, this is one of the key issues. Here is a quote:

"The European decision to back the rest of the world in demanding the creation of a new international body to govern the Internet clearly caught the Americans off balance and left them largely isolated at talks designed to come up with a new way of regulating the digital traffic of the 21st century.

"It's a very shocking and profound change of the EU's position," said David Gross, the State Department official in charge of America's international communications policy. "The EU's proposal seems to represent an historic shift in the regulatory approach to the Internet from one that is based on private sector leadership to a government, top-down control of the Internet."

Do you think the locus of control should be private and based in the US?

BusinessWeek on Verizon's fiber buildout

Viewing this requires a subscription for now (probably it will be free next week). In it, Olga Karif examines Verizon's offering over the fiber that they are pulling to the home in selected cities. She argues that the payback on this investment is at least ten years out (more if a significant price ware ensues). The article also discusses the various regulatory approvals from states and municipalities that it must win to offer this service. To me, this shows that the US has a ways to go yet to smoothe the path for investment and entry into telecommunications.

• How would the draft telecommunications bill (or alternative ideas, such as those proposed by the PFF) help?
  
• Should Verizon have more flexibility (and less friction) to carry out this business plan?

More on GoogleNet ...

So the "stealth" GoogleNet appears to be taking form ... see this post. I was intrigued by the notion of letting the "buzz" do the marketing for them.


ZD Net noted the following:

"Maybe Google Ads, tied to mobile presence?

"Say they know you are in NYC's Bryant Park. Bryant Park is right next to the main branch of the New York Public Library. That's a place frequented by lots of educated readers, computer users, researchers - and hmm, Google users, too.

"OK, let's think about it some more. Maybe if I am a Google salesperson in the NYC office, I visit nearby merchants and sell them Google AdWords?

"Google AdWords or Google AdSense tied to mobile presence? Definitely.

Arab mobile communications blog

Here is an interesting blog to follow ... on Arab mobile communications . This is the first one that I have come across with such a regional focus.

Municipal networks

Municipal networks, as Dr. Shin posted earlier on this blog, are a topic of interest in telecommunications. Now, Om Malik reports that the total market size of municipal networks in the US could be close to $700 million for equipment manufacturers. It may not surprise you, then, that they might be encouraging municipalities to make the investment.

I find it ironic that, after a decade of privatizing communication networks throughout the world, that this tred exists.

BT spins off local loop operations

This is a very interesting note on Om Malik's blog. Lacking more details, this appears to partition the telephone network in the UK into separate access provision (local loop) and service provision (switching) companies. The access provision business, which will apparently be called "openreach". This is something that has been under discussion among academics for some time ... the idea is that a separate access division will be indifferent to service providers, levelling the field for service competitors. Is this a tacit acknowledgement that, perhaps, the local loop is a "natural monopoly"?

Forbes article on Broadband penetration

Lisa DiCarlo, writing in Forbes Magazine, reports that broadband uptake in the US is on the decline. This is based on a paper at the Telecommunications Policy Research Conference, which will be taking place this weekend in Washington. TPRC is one of the premier conferences in the field. The papers are on-line ... I encourage you to take a look!

Huston's Policy Questions for the Internet

This article points to some of the issues that we will be dealing with in the future. At its conclusion, it points to the upcoming WSIS even, which I adddressed in an earlier entry in this blog.

Google WiFi service?

There have been a few stories around lately about Google's entry into computer networking, starting with a report in Business 2.0 in addition to this Reuters article from today. The Business 2.0 article claims that Google could save money by avoiding transit fees it incurs from interconnecting with Internet backbone providers.

I am doubtful about this claim, because backbone providers are willing to peer with others only when traffic flow is symmetric. Going to a separate network, as these articles suggest, would enable Google to bypass backbone providers entirely for at least a portion of thie search. Is this a reasonable strategy? Is this a way for Google to leverage network economics to its advantage? Would Google be able to offer new services? Is this effectively a replay of the Western Union/AP deal of the 1860s?

EuroTelco Blog

For those of you with a particular interest in European matters, check out this blog.

New Telecom Bill proposed in US

Om Malik, an industry observer and reporter for Business 21.00, reported that a new ,telecom bill has been proposed in the US Congress. Time will tell if this proposal gains traction and works its way through the legislative process. Stay tuned...

Here is the PFF's first response.

Canadian Telecommunications Policy Review

I would like to draw your attention to an ongoing review of Canadian Telecommunications Policy. The second round comment period ends today. The submitted comments are all available on line.

I would like to point out some procedural elements that are noteworthy. First, the publication of a consultation paper. Second, the publication of terms of reference. Third, the availability of two comment periods -- one for initial comments and the other for clarification/rebuttal. Why and how are each of these elements useful and important? You might also take a sampling of some of the submitted comments; do they reflect the positions you might expect? Were you able to think of a viewpoint that was not represented?

Hurricane Katrina and telecommunications policy

There have been a number of comments related to telecom policy generally and Hurricane Katrina. The New America Foundation points to ways in which past spectrum policy failures may have contributed to the slower responses. Not surprisingly, a Congressman was critical of support for public safety communications.

The FCC has created a website to facilitate recovery efforts.

Mobile standards and developing countries

The report in the URL points to growth in GSM use in Latin America due to the decline in TDMA. The last paragraph of the report is significant, and why both AT&T wireless and Cingular (prior to their merger) independently chose to migrate to GSM from TDMA (and not CDMA) -- cheaper handsets. This is primarily because GSM is a simpler technology, therefore cheaper to implement. Scale economies also play a role, as GSM has the larger market share worldwide by a large margin (over CDMA).

The primary advantage of migrating from TDMA to CDMA is that the migration to 3G is less disruptive and (potentially) less expensive for the service providers.

Wireless substitution for wireline service

The Yankee Group recently published a report on the substitution of wireless for wireline service. Nobody disputes that this is an ongoing trend. The question is, when will it stop. Do you have both wireless and wireline service? If so, why haven't you cancelled the wireline service? If not, how are you meeting you voice, data, and video communication needs?

Another interesting question is what the wireline carriers should do in response to this trend. Should they abandon their infrastructure and write it off (eg. shrink as a company)? Should they transform their infrastructure in some way? If the latter, how?

Privatization

Much of the literature treats privatization as an event. As this story points out, it is better to view it as a multi year process ...

In similar fashion, the privatization of Telstra, the Australian incumbent, is not yet complete either.

CRS Report on Telecom Act

The Congressional Research Service (CRS) is an arm of the US Congress that is tasked with researching topics of interest to congressmen. These are not published broadly by the CRS. Instead, they are available through elected officials. The Center for Democracy and Technology (CDT) has begun an "Open CRS" project, where they post reports that have been obtained by others.

The report at this URL is of interest to you as students in this course.

http://opencrs.cdt.org/rpts/RL33034_20050812.pdf

OECD ICT indicators

This is potentially useful. It is an ongoing compendium of ICT indicators from OECD countries. These kinds of data can be extremely helpful in analysis. Visit the following URL for more details.

http://www.oecd.org/document/23/0,2340,en_2649_37409_33987543_1_1_1_37409,00.html

Cool page on US telephone history

This page (http://www.sandman.com/telhist.html) has a very brief summary of major events in deregulation in the US. What is cool about it is that it has pictures of the devices ... so you can see what they were talking about!

World Summit on the Information Society (WSIS)

The second WSIS meeting is to take place this coming November. Part of this effort is toward expanding the benefits of the Information Society to nations that have not yet benefitted in a widespread way, and another part is to rebalance Internet governance. Despite attempts to broaden the governance of the Internet through the establishment of ICANN (www.icann.org), the Internet's governance is still strongly rooted in the US.