28 October 2005

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.

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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?

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27 October 2005

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?

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26 October 2005

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.

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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?

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24 October 2005

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)?

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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.

21 October 2005

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?

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19 October 2005

Internet De-Peering

Level 3 communications broke a peering arrangement with Cogent Communications Group last week, which was caused by (1) unbalanced Internet traffic or (2) retaliation against Cogent's below cost pricing. If you need more information about peering concept, please refer to Peering and Settlement paper written by Dr. Weiss and me.

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:

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 ...

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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.

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18 October 2005

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)?

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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?

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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?

17 October 2005

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:


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."

13 October 2005

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).

12 October 2005

"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.

"Interconnection" of Instant Message

The collaboration between Microsoft and Yahoo in Instant Message can bring convenience for users and decrease hassles of multiple Instant Massage accounts. There is no obligatory regulations to force ISPs working together for this service, I believe the cooperation is pure strategic consideration. The alliance (Microsoft and Yahoo) can create some negotiation niches for Microsoft to bargain with the market leader (AOL) for its possible joint venture, besides the network externality of new alliance can deter the development of Google’s service.

11 October 2005

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?

07 October 2005

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?

06 October 2005

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?

05 October 2005

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)?

04 October 2005

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:

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?