29 December 2006

AT&T BellSouth merger

In case you haven't been following the saga of this merger, you might want read this short item to bring you up to speed. Now, in an effort to break the deadlock, AT&T submitted this letter to the FCC in which they outline further commitments. The mainstream media (MSM) is reporting this as a win for "net neut*" advocates. Om Malik has a different view, though ...

I find it interesting to speculate on the cost-benefit computations that underly these further commitments. It is not possible to estimate these without more extensive research, as the letter reports targets and not the current state of affairs. If these costs can be estimated, then we will presumably be able to estimate the benefits that AT&T expects to obtain from the merger. This article provides a start at this analysis.

Update: The merger was approved on 29 December. Here is the FCC statement; you might also want to read the statements of the commissioners as well (here, here, here and here). This article provides a summary, as does this one. As these articles indicated, "net neut*" "purists" were not particularly happy. For examples of their concerns, see this, this, this, and this, among many others. On the other hand, this presents a more pragmatic analysis.

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Vodafone in India

This story in BusinessWeek isn't hot off the press at this point. In fact, you might enjoy Om Malik's analysis as well. However, I find a couple of things that are particularly interesting at a meta level:

The article reports that Vodafone is pursuing this acquisition to find growth. Growth, ultimately, is growth in revenues, but it is also closely related to growth in subscribers because of weak network effects and scale/scope economies at work. Vodafone is by no means alone here. Having finally digested the expensive spectrum auctions of the late 1990s, they are finding growth relatively weak in their "home" markets (Europe) despite the rollout of 3G technologies such as HSDPA.

Update (2007/1/5): This article in BusinessWeek indicates that interest in India's carriers is very hot. Note that Verizon and Vodafone operate Verizon Wireless as a joint venture ...

Update (2007/1/10): After meeting with the Commerce and Industry Minister Kamal Nath, this bid appears to be moving forward.

Update (2007/1/17): This analysis is insightful, building a case for the importance of this acquisition to Vodafone

Are expectations of 3G-related revenue growth modest enough to warrant an investment of this kind?

Is this a useful model for a developing country? I.e., to invest organically in its infrastructure to the point of "viral" growth and then to consider a partnership with a carrier based in and industrialized country to complete the rollout?

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28 December 2006

WiMAX as a backhaul technology

There have been questions raised about the suitability of WiMAX as a competitor to WiFi or 3G because of the return path challenges (see this, for example). As I have noted earlier, Sprint Nextel plans to roll out a national WiMAX network as its 4G mobile technology. This article in BusinessWeek indicates that Sprint Nextel's real motivation is different ... to reduce the cost of backhaul in its wireless network. The article goes on to suggest that the main business target of a WiMAX network is not mobile customers, but fixed small businesses who need DS-1 level speeds.

Do you find this argument compelling? Do you think that WiMAX has a future as a mobile wireless technology?

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The beginning of the end for VoIP?

This item in BusinessWeek is very interesting ...

Traditional telcos' services can, in fact, prove to be cheaper when calling countries like Israel, he says. My personal experience shows that using prepaid calling cards is still cheaper when dialing Russia, meanwhile.


If VoIP is truly the cheapest switching technology (as I argued in my 1999 TPRC paper), why does this observation obtain? Is this more an issue about business models than cost of technology?

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Taiwan quake and telecommunications

This article is a nice case study of how natural events can affect telecommunications. Despite our best efforts to engineer robust networks, it seems that these systems remain relatively fragile in the face of natural events of this magnitude. This article in Forbes indicated that the initial impact of the quake was quite severe.

Update (2006/12/28): This article indicates that service is being restored, though it appears to be far from "normal".

Update (2006/12/29): There are a couple of additional articles that contain a bit more technical detail that came out today (12/29). See this and this. This article reports on restoration plans and hints at the business impact.

Update (2007/1/3): The restoration work is just beginning, even though the interest of the media has largely moved on. The article reports estimates of late January to early February for complete restoration. Meanwhile, you might find this thread interesting with respect to an unanticipated consequence of the break.

Update (2007/1/5) This article in BusinessWeek goes a bit further in discussing restoration efforts, the costs, and cable design strategies than the previous articles did.

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21 December 2006

Repurposing VHF spectrum

This item points to an upcoming opportunity. As you may already know, the transition from analog to digital television will take place in the coming years. This will entail the release of the current television spectrum in the VHF and UHF bands.

Given the desirable propagation characteristics of the spectrum in this band, what would be the best application for this? Would this be a good "third pipe" wireless technology (perhaps using WiMAX)? How much bandwidth would be required to compete effectively with Comcast, Verizon and AT&T? Should this spectrum be allocated in this way, or should the allocation be "open" so that an auction winner could use it for any application they please?

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20 December 2006

Network neutrality and private decisions

In an earlier post, I had addressed Akamai and how their business might relate to network neutrality. Apparently, at least one company (Sony) has found it worthwhile to pay for better performance, according to this item from IPCentral.

Would this business arrangement be permissible if network neutrality regulations are enacted? Does this provide sufficient evidence of a demand for higher quality of service?

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Investment in fiber returns

There have been a number of stories in the past days about big undersea fiber projects (see this, for example). Om Malik takes a thoughtful view of this new trend in this post on GigaOM:
The first sign of a new dawn: a new network by Verizon Business1 (which in reality is the old MCI) and a gaggle of Asian telecom operators including China Telecom, China Netcom, China Unicom, Korea Telecom, and Chunghwa Telecom of Taiwan.

The new cable consortium is going to build a $500 million network called, Trans-Pacific Express, and the 18,000 kilometer cable system will have capacity of up to 1.28 terabits/second, but will eventually upgrade to over 5 terabits per second. The network will land on Nedonna Beach, OR, on the US side and will hit China at Qingdao and Chongming. It will also have landings in Tanshui, Taiwan, and Keoje, South Korea.

The new network should not come as a surprise to anyone who has been following the telecom and broadband markets. The traffic between Asia Pacific (and China in specific) and the U.S. has been increasing at a steady rate, and current infrastructure is feeling a bit stretched.

By the way, there is a cool visualization of undersea fiber capacity on the original post.

Do you think that this is being driven by offshore outsourcing? Or, are there other factors at work?

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WiMAX and scale economies

Om Malik posted this item over at GigaOM. He argues that adherence to global standards and common frequency ranges is essential to gaining the necessary economies of scale. But there is a fly in the ointment:
... standards could also bring scale economics to gear makers. In ideal conditions, that is. However, we have started to observe some disturbing trends that run counter to the scale-is-the-salvation argument, at least anytime soon. Concerns both about multiple frequency ranges as well as the question of fixed vs. mobile flavors may keep WiMAX from scaling up quickly, making it more vulnerable to Wi-Fi and 3G/4G cellular alternatives.

India and China are often showcased as the big WiMAX opportunities, and with a reason. Booming economies and a lack of legacy wired infrastructure makes WiMAX perfect for the local needs. However, as we noted last week, India is opting1 for WiMAX in the 3.3-to-3.4 GHz band, a spectrum slice not available in say, the U.S. market. So there are spectrum conflicts that need to be thrashed out.


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08 December 2006

UWB in Europe

I came across this item today that was interesting. Quoting the article:
Ultrawideband is to be legalised across Europe within the next six months, following its approval by a key European Commission group.

The short-range, high-bandwidth technology - which promises speeds of up to 1Gbps - has until now been illegal outside the US. Its status has now been reversed at a meeting on the 4th and 5th December of the Radio Spectrum Committee (RSC), a European Commission body which can mandate spectrum usage across the continent.

Ofcom's chief technologist, Professor William Webb, said on Friday that the UK regulator was "delighted" at the approval of ultrawideband (UWB). He pointed out that if the RSC approves a document "it automatically becomes EC law" and said the decision to mandate acceptance of UWB across all European states within the next six months was taken at an RSC meeting earlier this week.

Note that the chairman's report has yet to be posted on the RSC website. The cited article basically implies that this document has been accepted by RSC (perhaps with modifications). Note that pages 9-13 contain a draft Decision for the EC.

How does this compare to efforts at the FCC to allow UWB? How about elsewhere in the world?

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04 December 2006

ITU: Policy and Regulatory Challenges of NGNs

I came across this ITU site that you might find interesting. It looks to be, in part, a collection of work on this subject. This could be a good resource, especially if NGNs come into being someday.

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01 December 2006

GAO Report on Access Competition

The US General Accountabiltiy Office (GAO) released this report on the state of dedicated access competition that is worth a read. This report surveys sixteen metropolitan areas (including Pittsburgh) and assesses the extent of facilities based competition. The findings include:

Available data suggest that incumbents’ list prices and average revenues for dedicated access services have decreased since 2001, resulting from price decreases due to regulation and contract discounts. However, in areas where FCC granted full pricing flexibility due to the presumed presence of competitive alternatives, list prices and average revenues tend to be higher than or the same as list prices and average revenues in areas still under some FCC price regulation. According to the large incumbent firms, many large customers needing service in areas with pricing flexibility purchase dedicated access services under contracts that provide additional discounts. However, GAO found that contracts do not generally affect the differential cited previously, and that contracts also contain various conditions or termination penalties competitors argue inhibit customer choice.


What kind of response do you think is necessary or appropriate? What does this say to you about a pro-competition telecommunications policy? How do these results match with related studies elsewhere in the world (eg. the European Union)?

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28 November 2006

Telecom regulation in the EU

This article is a good illustration of the "give and take" between the European Commission and national regulators (here is the EU's press release on the subject). A similar example was published earlier on this blog.

Do you think that this supra-national approach can be replicated in other areas of the world? Do you think it should be replicated?

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Supreme court and telecom

This article in Forbes (free registration required) is one that bears watching. While it seems that the telecom aspect of this case is incidental, its potential impact on the industry may be huge.

27 November 2006

Comparing international broadband connectivity

At least once per year, one organization or another reports on broadband in the US as it compares to other countries -- see this earlier post, for example. Inevitably, the US does not compare well to our trading partners on these reports, which has resulted in calls for government action to remediate this gap. In that context, I found this item that was posted over at PFF's blog to be an interesting departure. Note that the author of the Analysys report is Michael Kende, one time FCC staffer.

Do you think that the report cited by PFF is the right way to go? Are any of these reports meaningful in a way that should prompt government action? How would you measure connectivity in a more meaningful way?

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Wireless data services and net neut

In reading a special section of BusinessWeek (free registration required), I came across the following quote in this article:
Mobile operators such as Vodafone have long been content to fly solo as they make the costly push beyond voice calling into data. Many European carriers reckoned they didn't need to form partnerships to make good on upwards of $100 billion spent on the government-issued licenses needed for delivering advanced wireless services such as Internet access.

They may be singing a different tune, judging from a spate of recent announcements. Vodafone, for example, announced on Nov. 14 that it was forming a partnership with Yahoo! (YHOO) to put advertisements on mobile phones. Then, on Nov. 16, Hutchison Whampoa's British wireless operator 3 unveiled its X-Series, which bundles wireless broadband applications including Google and eBay for a flat fee, an effort aimed at encouraging customer adoption of data services


Is this the same as the fees that content providers are upset about in the US? If so, why the change? Is there a relationship between the content provider's interest and the carrier's?

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22 November 2006

Bandwidth, applications and net neut

This article posted in Forbes today (free subscription required) discusses the impact of new Internet applications on the bandwidth requirements of the backbone. In the article, Dan Frommer writes:
Thanks to video sites like YouTube, News Corp.'s (nyse: NWS - news - people ) social networking phenomenon MySpace and online videogame services like Microsoft's (nasdaq: MSFT - news - people ) Xbox Live, U.S. Internet carriers saw usage increase up to 90% in the past year, Nortel estimates. It's not that more people are getting on the Web; it's what they're doing when they're on there. A conventional Web site may push a few hundred kilobytes of data across the Internet over a three-minute span, but watching a streaming video clip for the same amount of time requires moving ten times as much data.

The increased traffic demands are forcing giant telecommunications carriers that carry much of the world's Internet traffic to keep sinking billions of dollars into their networks. Research firm Infonetics projects that major carriers will spend $203.1 billion worldwide on capital expenditures this year, up 5% from last year. But unlike the last build-out, when companies buried thousands of miles of long-haul fiber-optic cable under the sea and across continents, today's construction is focused more on connecting local homes and businesses with faster Internet pipes.

"The bottleneck is still in the local and metro areas," says Lisa Pierce, a vice president with research and consulting firm Forrester. "It's not being built out fast enough."


Does this add credence to the arguments of the carriers in the "net neut" debate?

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21 November 2006

Spectrum harmonization

You might find this report interesting, written at the behest of the European Commission by the consultancy Booz Allen and Hamilton. In case you're wondering what they mean by "harmonization", you might find this definition helpful:
Harmonisation in this study means defining technical conditions, including spectrum, band plan and technology, at a global and regional level, to ensure efficient spectrum use, seamless services over wide areas including roaming, system co-existence and global circulation of user equipments across borders.

Then again, maybe not ...

Not suprisingly, they find benefits in harmonizing spectrum, though others would argue that a free market approach confers more benefits on the end users in the end. They present some data, like SMS use, to bolster their argument.

Are there other ways to interpret the data they present? Perhaps comparative cost matters, for example. Was there anything else in the report that you found worthwhile?

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17 November 2006

iTunes, networks, and digital music

As I mentioned in this post earlier, the current trend in digital music seems to be toward developing closed platforms (or vertically integrated systems). While this enables the provider to capture the value of networks and to lock consumers in, it also creates powerful incentives for consumers to find work-arounds. Given the market dominance of Apple's iPods, it isn't surprising to find some workarounds.

Certainly converting to analog and re-converting to MP3 is one way of doing this, it results in a loss of fidelity. A "cleaner" way of doing this, and one that would not involve the loss of fidelity, would be to circumvent the controls digitally. This is basically what is reported in this article.

On a related note, you will find this article, over at Telecom Liberation Front, in which Adam Thierer talks about the benefits of incompatible platforms.

What do you think the implications are for Apple? What about for the other music services? What about for the non-iPod MP3 players? Do you think that Apple will react? What kinds of reactions would you expect from them?

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16 November 2006

Ofcom report on new technologies

The Office of Communications (Ofcom) is the telecommunications regulator in the UK. They issued this report recently on technology research recently. In this report, they highlight the impact of wireless technologies such as dynamic spectrum access and mesh networks. They are also expecting continued impacts from telecom liberalization.

Do you think that this list would be similar for most industrialized countries? What about for developing countries?

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14 November 2006

"Body of Knowledge" in infrastructure regulation

I came across this item on the ITU website today. This seems like it is an interesting adjunct to the World Bank's Handbook.

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07 November 2006

Roaming charges in the EU

This item was released today by the EU. It is no surprise that consumers want reduced roaming charges -- after all, who is eager to pay more? The main question that occurs is how to accomplish this. It is certainly possible to regulate roaming charges, but is this the best way to go? If you think this, how would you determine "excessive"? Another alternative is to publish current (and correct) information about roaming rates, and allow consumers to use that information when choosing a service provider (i.e., "regulation by information"). Finally, is it possible that structural solutions may work? For example, roaming is a non-issue in the US for most people. Why is there a difference?

By the way, the PDF that is linked to the above website is worth a read!

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Verizon, YouTube and network neutrality

This article reports a pending deal between Verizon and YouTube, which was recently purchased by Google. What is notable here (to me) is that these two firms were on opposite sides of the network neut* debate. In fact, I could probably make the case that YouTube is the kind of service that serves as a kind of "canary in the coal mine" for this debate. On the one hand, it is an innovative service that seems unlikely to emerge if transport and content is exclusively linked (so it serves the pro-regulation side of the debate). On the other hand, it is a high bandwidth service (being streaming video) that the carriers are concerned with (so it serves the pro-market side of the debate).

So, what do you make of this? Is this an indication that these content/carrier issues can be sorted out by private contracting in the general case? Does this suggest that "network neutrality" regulation is unnecessary?

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06 November 2006

Metcalf's law discussion

Some of you might have heard about Metcalf's Law, which states that the value of a communications network grows as the number of users grows. So, you might be interested in listening in to a conversation that was stimulated by an article in July's IEEE Spectrum.

So what do you think? Who is right? Does the growth rate matter?

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Municipal franchising

The subject of municipal franchising has been becoming a "hot button" issue -- one that is likely to be addressed in any legislation reforming telecommunications regulation in the forthcoming years. In some cases, it has been addressed by state law.

Like any issue, it has (at least) two sides. Verizon and AT&T, who seek relief from having to seek permission on a one-by-one basis, cite high costs. This article, appearing in Forbes, describes the case of one town. Here we see interests of the public as well as active lobbying against the franchise by their (CATV) competitor. A recent editorial in the Pittsburgh Post-Gazette articulates some of the "public interest" arguments that emerge.

Do you think that it is unreasonable to ask new entrants (such as Verizon and AT&T) to get franchises individually for each of the municipalities they wish to serve? Do the (CATV-based) incumbents have a competitive advantage due to the power of their incumbency? Are the "public interest" arguments valid in your view? Why or why not?

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02 November 2006

HBO, Broadband, and Network Neutrality

In case you missed it, this story in BusinessWeek has some interesting aspects that seem to me to be closely related to the ongoing debates in the telecom industry. The short story here is that HBO, the premium television channel, lacks an on-line presence. So, the question that faces them is how to establish it. Certainly they can go it alone (as STARZ did), or they can partner with broadband access providers (eg. Comcast).

By partnering, do they set a precedent for the kinds of payment structures that some content providers oppose in the guise of "network neutrality"? Is this an example of private contracting to overcome a "small numbers" bargaining problem? So, is this the vanguard of the future or is this a "last gasp" of a legacy, mainstream media business model?

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30 October 2006

Transition to IPv6

This topic comes up from time to time (see, for example, this post). Today, BusinessWeek's website had this article that addressed the subject again.

Do you think things are different now than they were last year when I blogged about this subject before? Why or why not?

Update (3 Nov 2007): Robert Cringley must have had the same topic on his mind (see this). Please take the time to read the response comments at the end. Does this change your opinion? How does this gel with the BusinessWeek article, in your view?

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26 October 2006

Demand for Internet services and the demand for electricity

I found this post in Nicholas Carr's blog interesting. Discussions around electricity and data center demand has surfaced before elsewhere.

  • This article discusses the impact of power demand on system design

  • The impact of power on service provider strategies have been discussed here (and elsewhere)

  • Articles like this one show how sensitive large data center firms are to the price and supply of electricity


Taken together, interesting questions begin to emerge.

Since data centers can be located anywhere, can we begin imagining an "outsourcing" of data centers (a commenter on Carr's blog suggests this)? Can this be conceived of as a strategy for economic development? To what extent do national e-commerce and energy policies intersect? Could you conceive of a tie between electricity supply and the "net neut*" debate?

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20 October 2006

Nortel and Internet capacity

You might find this item of interest. Nortel, an equipment manufacturer, stands to benefit from the demand for capacity they are forecasting in this article, so it is possible that they are overstating the case somewhat.

But what if they are generally right? Does this affect your view on "net neut*"? Why or why not?

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Universal service

The conversation around universal service pops up from time to time in policymaking arenas. Here is an op-ed that may get some of you fired up on this subject!

Is there still a good rationale for a "universal service" program in the US? If so, which elements of the program should be funded? How should the money be distributed? Should it be funded out of a sector-specific tax or out of general tax revenues?

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James Enck's "Ten Points"

This post over at James Enck's Eurotelcoblog is worth reading. In the article, Enck reflects on some possible transformations that are underway in the industry.

What do you think of his ten points? Do you agree or disagree?

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19 October 2006

OECD broadband statistics

The OECD periodically publishes broadband statistics for its member countries, which are all industrialized. The latest report can be found here. There are a few surprises here of note:
  • First, the US ranks ahead of Japan in broadband penetration, which I believe to be a first.
  • Another interesting thing is that the US is the only OECD member country in which cable modem subscribership is ahead of DSL. But, the use of each of these technologies is remarkably balanced (8/100 for DSL and 9.8/100 for cable) compared with other OECD countries.
So that brings to my mind a few questions ... what do these statistics say about some of the concerns raised by "net neut*" proponents? Would you anticipate "net neut*" arguments to emerge in other countries as well?

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13 October 2006

EU announces telecom infringement cases

I have posted earlier about the telecom review currently underway in the EU. In connection with that, the European Commission has filed 9 new "infringement" cases (see this page for details). These infringements are the mechanism by which member states can be held to EU-wide policy levels.

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27 September 2006

FiOS Update

Verizon's FiOS is a project that has garnered attention from many sources. Some say that it is too expensive, especially considering that AT&T is choosing a less costly architecture. This report posted today in BusinessWeek reports some project cost estimates and gives some initial market results.

Is this a worthwhile gamble for Verizon? Will they be vindicated, or will the cheaper architectures turn out to be the better choice?

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19 September 2006

WiMAX in India

I had posted earlier about 3G in India. Continuing on this theme, I came across this item, which details India's WiMAX plans. As I posted earlier, Sprint sees WiMAX as a 4G technology ...

Would you imagine WiMAX as a viable technology in India? Are these frequency bands the same as the bands being used by other countries? If they are different, what kinds of issues arise? Does it seem as though the Indian Department of Telecommunications is positioning WiMAX in the same fashion as Sprint-Nextel is?

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18 September 2006

Closed platforms and digital music

You might have spotted this article, as I did today. Nicholas Carr must have as well, because he had this thoughtful reflection on his blog. This topic also caught the attention of Arik Hesseldahl at BusinessWeek, who has this interesting article to complement the others. I have studied standards and standards development, phenomena that are a way to acheive interoperability among products from competing suppliers. What is interesting is that we are moving into a "battle of the systems" model, rather than a "battle of the components" model.

Is this a transitory phenomenon, or is there something about the information industries that is pulling in this direction? Do you see similar phenomena in other instances of the information industries?

You might also be interested in this article at ZDNet, which mentions some of the consequences of the shifting sands of industry structure. Can you think of other times that were similar, or do you think this is without precedent?

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15 September 2006

Akamai and network neutrality

I came across this article in BusinessWeek about Akamai. As I read it, I began wondering about the practical side of "net neut*", about which I had posted earlier (follow this link). While I know this is a topic on people's minds, there has been relatively little discussion about it over the past couple of months -- perhaps because of the Congressional recess.

Does the deeper insight into Internet service provision enrich your position on this topic? Do you think that Akamai (and/or Google) would be in a position to construct an alternate backbone if they find AT&T's (or Verizon's) pricing unacceptable (that is, do we see echoes of the Western Union/Associated Press here? Does this change the debate for you, especially regarding the appropriate role of government?

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Interconnection in NGNs

Interconnection is an important (and sometimes difficult) topic in communications networks. This article, via the ITU Newsblog, points out that an interconnection regime for the so-called "Next Generation Networks" (or NGNs) is absent.

What do they mean by NGNs, anyway? Can existing interconnection regimes be adopted (or adapted) for these networks? Why or why not?

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Spectrum Auction No. 66 update

Today's USA Today has this article about the spectrum auctions, which, they report, could end today. How do the results reported in this article compare with the interim results discussed earlier on this blog? Do you see any change in strategy by the carriers as the auction proceeded?

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14 September 2006

3G in India

I found this item on Om Malik's blog interesting. It has long been suggested that developing countries might have some advantages by skipping generations of technology. This same thing was suggested in the 1980s and 1990s around digital switching, and it this isn't the first time that it has been brought up in connection with wireless systems.

Do you think this viewpoint has merit? Is the social or user "infrastructure" able to exploit these more advanced technologies? What about handset costs and how that affects penetration?

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13 September 2006

Telecoms in the EU

The ITU's newsblog pointed to these three studies of telecommunications in Europe. These studies are part of the ongoing review of the EU Communications Framework. They also pointed to this paper for your further reading pleasure. The upcoming Telecommunications Policy Research Conference will also feature a panel on this topic.

We will certainly be hearing more about this in the future!

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12 September 2006

Broadband TV

AT&T and Verizon have promised triple- or quadruple-play services on the FTTH networks that they are building. This appears to be the first incarnation of that for AT&T. While this article is short on technical details, it does allow users to select programming in an apparently on-demand format.

Would this replace or supplement your TV viewing? How is this different from TV cards that you can purchase for less than US$100 and plug into your existing cable system? Do you think this is a "who cares" service?

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Telecom Italia

This item has shown up in various news outlets over the past couple of days. What is interesting to me is that it seems to go against the prevailing trend toward consolidation. Others have wondered about this (see this article in BusinessWeek). Nonetheless, it is not without precedent (see this, and this, for example).

Do you think this is wise given the trend in access lines (see this for data)? Do you think the triple/quadruple play strategy that many carriers are following (i.e. an integrator strategy) will end up being best, or is a specialist strategy (like Telecom Italia's proposed strategy) better in the long run? In the context of globalization, John Hagel and others have argued for a specialist strategy; how does his argument apply to the telecom industry?

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11 September 2006

Regulatory Capture

When people like me who teach regulation discuss theories of regulation, we normally start with the "public interest theory" because that is the intellectual rationale for regulation. We then discuss how it is difficult to show how public interest regulation meets a "public interest" standard. One of the alternative theories that is offered is called "capture theory". All of this is a preface to a pointer to this article that Tim Lee posted over at Technology Liberation Front (that amounts to a book synopsis) on this topic.

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Broadband through gas pipes

Public utilities are industries that have historically been characterized by being capital intensive, slow growth, dependable revenue companies. During the "dot-com" boom of the 1990s, utility companies sought to break out of that mold by adapting their infrastructure to support new communications services. Enron was the "poster child" for that strategy. During their heyday, they acheived remarkable growth for a utility (in part due to fraud as it it turned out, though there was some significant innovation that happened there as well, especially in bandwidth trading).

Some of the biggest assets that a utility has are its rights-of-way and its installed infrastructure. So, utilities have been seeking ways of "monetizing" this asset. Sometimes this has meant allowing communications companies to install fiber in their conduits. In another case, electric utilities have developed power line communications (PLC) systems to bring communications services to businesses and residences over the electric power system (here is the Wikipedia post -- I haven't checked it yet for correctness).

What brings all of this to mind is this article in today's USA Today. Apparently some gas companies are interested in a system that uses Ultra Wideband (UWB) technology in gas lines to support communications over their infrastructure.

Why not treat gas lines as waveguides and use RF? Do you think this could be a viable "third pipe"? Why is such a third pipe desirable anyway? From a public policy standpoint, is it a good thing (or not) to have competition among a variety of "third pipe" technologies? Why or why not?

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07 September 2006

Spectrum Auction (No. 66) update

Earlier, I had discussed the spectrum auction currently underway in the US. In case you were wondering how it was going (as I was), this article in BusinessWeek has some answers for you. Not surprisingly, T-Mobile is one of the biggest bidders. They have long been spectrum constrained and this added capacity should help them expand their network. What is surprising is Verizon's activity. Apparently, they are girding up for providing more high speed services. The BW article also reports that the prices are attractive. Do you think that this accounts for the surprises in activity? How do you think this will change the competitive dynamics in the industry? Do you expect another wave of consolidation after the auction concludes?

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31 August 2006

Telecom usage in the EU

The EU's DG Information Society recently released this, which reports the results of a household survey of communications usage within the EU. There are many interesting things to be found in this report. You might enjoy comparing the results of this survey with those of the Pew Internet and American Life Project.

One thing that caught my eye was the response to Question 9 (p. 13), which was an exploration of the reasons why a household might not have a fixed line ... 38% cited mobile service that serves the needs of the household, and 30% said they did not want a fixed line.

So, enjoy your reading ... what did you find interesting in this report? Why?

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29 August 2006

Verizon, AT&T and the USF

This article does a nice job summarizing a debate that has been going on in telecom policy circles over the past month or so (this is another related item). One interesting thing about the universal service fee is that the FCC never required telcos to separately itemize this fee ... they chose to do so. Now, with its elimination for DSL, it becomes obvious to consumers who take the time to look at their bills.

Do you think Verizon's ability to retain the revenues from this fee (basically increase prices by the amount of the fee) is evidence of significant market power? Do you think that Verizon is within their rights to do this, or do you think it is an abuse of regulatory relief? Do you think that the FCC (or another government agency) should take action? If so, what should they do?

Update: On 30 August 2006, Verizon agreed to drop this "surcharge" (see this article, for example). If Verizon claimed to require these revenues to support their network upgrades, where do you think they will find them now? Is there a connection to network neut* here?

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28 August 2006

Internet consolidation since 2001

In this post, Om Malik summarizes some of the internet backbone consolidation that has taken place since 2001. While this includes some of the high profile mergers (Verizon and MCI, SBC and AT&T), it also includes some smaller ones.

How is this consolidation related to network neutrality? Do you think that the backbone market has relatively low barriers to entry (i.e., is contestable, even if it is more concentrated)?

On a side note, the beginning of this semester marks the one year anniversary of this blog! It has been fun ...

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21 August 2006

Broadband in Germany

There have been a number of interesting items over the past week that I will be bringing up over the next few days. The first of these is this item in BusinessWeek (and this one in the Washington Post). This policy, which requires the carriers in the EU to open their broadband networks to resellers, stands in contrast to the current policy in the US, one that has been addressed both by the FCC and the US Supreme Court.

Which approach do you think is right? What are the advantages and disadvantages of the EU approach? Is there a middle ground that you would recommend?

Update: In this article, Tom Hazlett argues that these rules inhibit innovation and investment. Do you agree with him?

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09 August 2006

History of Common Carriage in Telecommunications

Thanks to Bob Cannon, Prof. Jones' classic article on the History of Common Carriage in Telecommunications is now available on line. Common carriage has been one of the key ideas in telecommunications policy, and is one that regularly reemerges in telecom policy discussions. Happy reading!

Sprint Nextel, WiMax and 4G

There were a couple of articles about Sprint Nextel and their investment in WiMax. The first is this article in Forbes, in which they report that Sprint is treating this as their 4G technology (Forbes also published this interview with Gary Forsee, CEO of Sprint Nextel). Om Malik went a little further in his analysis yesterday, in which he cited Qualcomm's licensing fees as a factor (he continued in this post).

Update: This article is a nice supplement to the above resources.

Do you think that WiMax has the potential to serve as an alternative to a cell-based 4G network? Do you think that Sprint Nextel's move will put pressure on Qualcomm to reduce their licensing fees?

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03 August 2006

Secondary use and Sprint-Nextel

As many of you know, secondary spectrum use is a current research theme that I am pursuing. So, this article is of significant interest. Sprint/Nextel has been aggressively pursuing Type 1 secondary use ... often known as a Mobile Virtual Network Operator (MVNO) strategy. This article suggests that they are less successful in this than they might be. Is this because the strategy is flawed, or because their partners are weak, or because secondary use is less attractive as a result of the upcoming spectrum auctions? We'll know the answer to the latter if the MVNO partners become spectrum owners ...

Update: On a side note, this article raises questions about how potential network neut* rules would apply to MVNOs. Do you think they should? Should any network neut* rules be applied only to the Internet? If so, aren't we setting up technlogically-based regulation that convergence is fated to make obsolete?

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01 August 2006

Upcoming spectrum auctions

In case you have missed it, the FCC is about to auction off a fairly large chunk of spectrum. This article in Forbes does a good job in summarizing the auction and the business aspects of wireless in the past several years.

Do you think that the government should be concerned with the financial fortunes of the major carriers when deciding when and how much spectrum to auction? What services do you think will emerge? What is the prospect of secondary markets or secondary spectrum use as a result of these auctions?

Update: Om Malik reports that this spectrum will be going for less than previous spectrum ... something about supply and demand?

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GSM vs. CDMA, again

As you should know by now, standards wars are longstanding area of interest of mine. While not a classic standards war, the technology rivalry between GSM and CDMA has captured both my interest and the interest of some of my doctoral students (see, for example, this item, and also this one). Thus, when this article came to my attention, I was moved to bring this technology rivalry up again.

Do you think this is largely a concern for 2G (and 2.5G) networks? Is this article at all relevant to 3G networks? If you are a CDMA user, have you considered switching to a GSM network because of the technology? If so, why?

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28 July 2006

More on HD video standards

I have blogged about HD format standards earlier. If you have been paying attention to the news, you know that the standards war is well underway, with products on the market for both the HD-DVD and the Blu-Ray standards. So, this article in today's Washington Post caught my attention.

Do you think that agreement between the two HD camps on camcorders provides a way out of the standards war or is it a "red herring"?

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The Missoula plan

Those of us who are interested in the history of telecommunications in the US recall the different "plans" (eg. Ozark) that were developed by NARUC and were implemented by the FCC. Well, the issue of intercarrier settlements has arisen again because of the emergence of VoIP and the recent wave of mergers in the telecommunications industry. As a result, NARUC developed the "Missoula Plan". A very brief presentation about the motivation and the expected outcome can be found here; the text of the plan is here.

It is interesting to view this matter in the context of carrier interconnection and universal service. Interconnection has long been an object of contention between carriers (see this for a recent rendition); and many have argued that universal service funding is seriously flawed (see this, for example).

Do you think the Missoula Plan makes progress toward resolving some of these issues?

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Internet governance

Although the outcome of WSIS was continued US control of the Internet, it resulted in a broader discussion on Internet governance. Now, according to this article, apparently the US is moving toward a broader conception of Internet governance (you might also find Tim Lee's commentary on this interesting).

Do you think this most recent development is a result of the UN/WSIS process, or are there other forces at play? If it is the latter, what do you think those are?

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