Tag Archives: Wireless

Quote of the Day

March 25, 2013 ,

The statute wants a competitive analysis, but as the Commission correctly points out, competition is not the goal, it the means.  Better performance is the goal.  When the evidence presented in the Sixteenth Report is viewed in this way, the conclusion to be reached about the mobile industry, at least to me, is obvious:  the U.S. mobile wireless industry is performing exceptionally well for consumers, regardless of whether or not it satisfies someone’s arbitrarily-defined standard of “effective competition.”

— George Ford, Phoenix Center chief economist, commenting on the FCC’s 16th Wireless Competition report.

Posted in: Uncategorized , Tagged: , ,

Data roaming mischief . . . Another pebble in the digital river?

March 17, 2011 ,

Mobile communications is among the healthiest of U.S. industries. Through a time of economic peril and now merely uncertainty, mobile innovation hasn’t wavered. It’s been a too-rare bright spot. Huge amounts of infrastructure investment, wildly proliferating software apps, too many devices to count. If anything, the industry is moving so fast on so many fronts that we risk not keeping up with needed capacity.

Mobile, perhaps not coincidentally, has also been historically a quite lightly regulated industry. But emerging is a sort of slow boil of small but many rules, or proposed rules, that could threaten the sector’s success. I’m thinking of the “bill shock” proceeding, in which the FCC is looking at billing practices and various “remedies.” And the failure to settle the D block public safety spectrum issue in a timely manner. And now we have a group of  rural mobile providers who want the FCC to set prices in the data roaming market.

You remember that “roaming” is when service provider A pays provider B for access to B’s network so that A’s customers can get service when they are outside A’s service area, or where it has capacity constraints, or for redundancy. These roaming agreements are numerous and have always been privately negotiated. The system works fine.

But now a group of provider A’s, who may not want to build large amounts of new network capacity to meet rising demand for mobile data, like video, Facebook, Twitter, and app downloads, etc., want the FCC to mandate access to B’s networks at regulated prices. And in this case, the B’s have spent many tens of billions of dollars in spectrum and network equipment to provide fast data services, though even these investments can barely keep up with blazing demand.

The FCC has never regulated mobile phone rates, let alone data rates, let alone data roaming rates. And of course mobile voice and data rates have been dropping like rocks. These few rural providers are asking the FCC to step in where it hasn’t before. They are asking the FCC to impose old-time common carrier regulation in a modern competitive market – one in which the FCC has no authority to impose common carrier rules and prices.

In the chart above, we see U.S. info-tech investment in 2010 approached $500 billion. Communications equipment and structures (like cell phone towers) surpassed $105 billion. The fourth generation of mobile networks is just in its infancy. We will need to invest many tens of billions of dollars each year for the foreseeable future both to drive and accommodate Internet innovation, which spreads productivity enhancements and wealth across every sector in the economy.

It is perhaps not surprising that a small number of service providers who don’t invest as much in high-capacity networks might wish to gain artificially cheap access to the networks of the companies who invest tens of billions of dollars per year in their mobile networks alone. Who doesn’t like lower input prices? Who doesn’t like his competitors to do the heavy lifting and surf in his wake? But the also not surprising result of such a policy could be to reduce the amount that everyone invests in new networks. And this is simply an outcome the technology industry, and the entire country, cannot afford. The FCC itself has said that “broadband is the great infrastructure challenge of the early 21st century.”

Economist Michael Mandel has offered a useful analogy:

new regulations [are] like  tossing small pebbles into a stream. Each pebble by itself would have very little effect on the flow of the stream. But throw in enough small pebbles and you can make a very effective dam.

Why does this happen? The answer is that each pebble by itself is harmless. But each pebble, by diverting the water into an ever-smaller area,  creates a ‘negative externality’ that creates more turbulence and slows the water flow.

Similarly, apparently harmless regulations can create negative externalities that add up over time, by forcing companies to spending  time and energy meeting the new requirements. That reduces business flexibility and hurts innovation and growth.

It may be true that none of the proposed new rules for wireless could alone bring down the sector. But keep piling them up, and you can dangerously slow an important economic juggernaut. Price controls for data roaming are a terrible idea.

Posted in: bandwidth, Exaflood, Mobile , Tagged: , , ,

A Victory For the Free Web

April 7, 2010 ,

After yesterday’s federal court ruling against the FCC’s overreaching net neutrality regulations, which we have dedicated considerable time and effort combatting for the last seven years, Holman Jenkins says it well:

Hooray. We live in a nation of laws and elected leaders, not a nation of unelected leaders making up rules for the rest of us as they go along, whether in response to besieging lobbyists or the latest bandwagon circling the block hauled by Washington’s permanent “public interest” community.

This was the reassuring message yesterday from the D.C. Circuit Court of Appeals aimed at the Federal Communications Commission. Bottom line: The FCC can abandon its ideological pursuit of the “net neutrality” bogeyman, and get on with making the world safe for the iPad.

The court ruled in considerable detail that there’s no statutory basis for the FCC’s ambition to annex the Internet, which has grown and thrived under nobody’s control.

. . .

So rather than focusing on new excuses to mess with network providers, the FCC should tackle two duties unambiguously before it: Figure out how to liberate the nation’s wireless spectrum (over which it has clear statutory authority) to flow to more market-oriented uses, whether broadband or broadcast, while also making sure taxpayers get adequately paid as the current system of licensed TV and radio spectrum inevitably evolves into something else.

Second: Under its media ownership hat, admit that such regulation, which inhibits the merger of TV stations with each other and with newspapers, is disastrously hindering our nation’s news-reporting resources and brands from reshaping themselves to meet the opportunities and challenges of the digital age. (Willy nilly, this would also help solve the spectrum problem as broadcasters voluntarily redeployed theirs to more profitable uses.)

Posted in: Net Neutrality , Tagged: , , , , , , ,

More wireless connectivity? Or more politics?

April 1, 2010 ,

For years we’ve been talking about the need for more wireless bandwidth, more spectrum, and a host of creative new strategies to complement our mobile phone networks — from familiar Wi-Fi to more exotic femtocells and satellites. The continuing explosion of mobile data traffic means we need these things now more than ever. In the graph below, Cisco projects 120% compound annual growth in North American mobile data from 2009 through 2013.

The Federal Communications Commission recognized these trends and needs in its new National Broadband Plan. It set the bold goal of unleashing 500 MHz of mostly dormant wireless spectrum for more productive use in new broadband Internet and media applications.

On March 29, the FCC had a chance to begin putting its Plan into action when it approved the acquisition of SkyTerra by Harbinger Capital. The result of the merger is a new wireless company that will use both MSS satellite spectrum and so-called ATC terrestrial spectrum to deliver a new hybrid mobile service. Harbinger announced it would build a nationwide, wholesale, “open access” 4G broadband wireless network at the cost of $6 billion. Although not part of the FCC’s 500 MHz push, the new Harbinger strategy aligns nicely with the goal of more, better, and broader wireless access and options throughout the country (in this case, Canada, too).

But the FCC order, which was not voted by the full commission but issued by the bureau chiefs, contains two curious provisions. The provisions restrict Harbinger’s cooperation with two important mobile service providers and could hinder the very goal of extending more wireless coverage to more Americans. (more…)

Posted in: Mobile , Tagged: , , , , ,

ExaTablet?

January 21, 2010 ,

The Wall Street Journal‘s Digits blog asks, “Could Verizon Handle Apple Tablet Traffic?”

The tablet’s little brother, the iPhone, has already shown how an explosion in data usage can overload a network, in this case AT&T’s. And the iPhone is hardly the kind of data guzzler the tablet is widely expected to be. After all, it’s one thing to squint at movies on a 3.5-inch screen and quite another to watch them in relatively cinematic 10 inches.

“Clearly this is an issue that needs to be fixed,” says Broadpoint Amtech analyst Brian Marshall. “It can grind the networks to a halt.”

Posted in: Uncategorized , Tagged: , , , ,

Wireless Crunch

November 22, 2009 ,

Adam Thierer makes important points about the wireless data boom . . . and the wireless spectrum crunch.

Posted in: Mobile , Tagged: , ,

New York and Net Neutrality

November 20, 2009 ,

This morning, the Technology Committee of the New York City Council convened a large hearing on a resolution urging Congress to pass a robust Net Neutrality law. I was supposed to testify, but our narrowband transportation system prevented me from getting to New York. Here, however, is the testimony I prepared. It focuses on investment, innovation, and the impact Net Neutrality would have on both.

“Net Neutrality’s Impact on Internet Innovation” – by Bret Swanson – 11.20.09

Posted in: bandwidth, Net Neutrality , Tagged: , , , , ,

Neutrality for thee, but not for me

October 4, 2009 ,

In Monday’s Wall Street Journal, I address the once-again raging topic of “net neutrality” regulation of the Web. On September 21, new FCC chair Julius Genachowski proposed more formal neutrality regulations. Then on September 25, AT&T accused Google of violating the very neutrality rules the search company has sought for others. The gist of the complaint was that the new Google Voice service does not connect all phone calls the way other phone companies are required to do. Not an earthshaking matter in itself, but a good example of the perils of neutrality regulation.

As the Journal wrote in its own editorial on Saturday:

Our own view is that the rules requiring traditional phone companies to connect these calls should be scrapped for everyone rather than extended to Google. In today’s telecom marketplace, where the overwhelming majority of phone customers have multiple carriers to choose from, these regulations are obsolete. But Google has set itself up for this political blowback.

Last week FCC Chairman Julius Genachowski proposed new rules for regulating Internet operators and gave assurances that “this is not about government regulation of the Internet.” But this dispute highlights the regulatory creep that net neutrality mandates make inevitable. Content providers like Google want to dabble in the phone business, while the phone companies want to sell services and applications.

The coming convergence will make it increasingly difficult to distinguish among providers of broadband pipes, network services and applications. Once net neutrality is unleashed, it’s hard to see how anything connected with the Internet will be safe from regulation.

Several years ago, all sides agreed to broad principles that prohibit blocking Web sites or applications. But I have argued that more detailed and formal regulations governing such a dynamic arena of technology and changing business models would stifle innovation.

Broadband to the home, office, and to a growing array of diverse mobile devices has been a rare bright spot in this dismal economy. Since net neutrality regulation was first proposed in early 2004, consumer bandwidth per capita in the U.S. grew to 3 megabits per second from just 262 kilobits per second, and monthly U.S. Internet traffic increased to two billion gigabytes from 170 million gigabytes — both 10-fold leaps. New wired and wireless innovations and services are booming.

All without net neutrality regulation.

The proposed FCC regulations could go well beyond the existing (and uncontroversial) non-blocking principles. A new “Fifth Principle,” if codified, could prohibit “discrimination” not just among applications and services but even at the level of data packets traversing the Net. But traffic management of packets is used across the Web to ensure robust service and security.

As network traffic, content, and outlets proliferate and diversify, Washington wants to apply rigid, top-down rules. But the network requirements of email and high-definition video are very different. Real time video conferencing requires more network rigor than stored content like YouTube videos. Wireless traffic patterns are more unpredictable than residential networks because cellphone users are, well, mobile. And the next generation of video cloud computing — what I call the exacloud — will impose the most severe constraints yet on network capacity and packet delay.

Or if you think entertainment unimportant, consider the implications for cybersecurity. The very network technologies that ensure a rich video experience are used to kill dangerous “botnets” and combat cybercrime.

And what about low-income consumers? If network service providers can’t partner with content companies, offer value-added services, or charge high-end users more money for consuming more bandwidth, low-end consumers will be forced to pay higher prices. Net neutrality would thus frustrate the Administration’s goal of 100% broadband.

Health care, energy, jobs, debt, and economic growth are rightly earning most of the policy attention these days. But regulation of the Net would undermine the key global platform that underlay better performance on each of these crucial economic matters. Washington may be bailing out every industry that doesn’t work, but that’s no reason to add new constraints to one that manifestly does.

— Bret Swanson

Posted in: Net Neutrality , Tagged: , , , , , , , , , , ,

Biting the handsets that connect the world

July 7, 2009 ,

Over the July 4 weekend, relatives and friends kept asking me: Which mobile phone should I buy? There are so many choices.

I told them I love my iPhone, but all kinds of new devices from BlackBerries and Samsungs to Palm’s new Pre make strong showings, and the less well-known HTC, one of the biggest innovators of the last couple years, is churning out cool phones across the price-point and capability spectrum. Several days before, on Wednesday, July 1, I had made a mid-afternoon stop at the local Apple store. It was packed. A short line formed at the entrance where a salesperson was taking names on a clipboard. After 15 minutes of browsing, it was my turn to talk to a salesman, and I asked: “Why is the store so crowded? Some special event?”

“Nope,” he answered. “This is pretty normal for a Wednesday afternoon, especially since the iPhone 3G S release.”

So, to set the scene: The retail stores of Apple Inc., a company not even in the mobile phone business two short years ago, are jammed with people craving iPhones and other networked computing devices. And competing choices from a dozen other major mobile device companies are proliferating and leapfrogging each other technologically so fast as to give consumers headaches.

But amid this avalanche of innovative alternatives, we hear today that:

The Department of Justice has begun looking into whether large U.S. telecommunications companies such as AT&T Inc. and Verizon Communications Inc. are abusing the market power they have amassed in recent years . . . .

. . . The review is expected to cover all areas from land-line voice and broadband service to wireless.

One area that might be explored is whether big wireless carriers are hurting smaller rivals by locking up popular phones through exclusive agreements with handset makers. Lawmakers and regulators have raised questions about deals such as AT&T’s exclusive right to provide service for Apple Inc.’s iPhone in the U.S. . . .

The department also may review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks . . . .

On what planet are these Justice Department lawyers living?

Most certainly not the planet where consumer wireless bandwidth rocketed by a factor of 542 (or 54,200%) over the last eight years. The chart below, taken from our new research, shows that by 2008, U.S. consumer wireless bandwidth — a good proxy for the power of the average citizen to communicate using mobile devices — grew to 325 terabits per second from just 600 gigabits per second in 2000. This 500-fold bandwidth expansion enabled true mobile computing, changed industries and cultures, and connected billions across the globe. Perhaps the biggest winners in this wireless boom were low-income Americans, and their counterparts worldwide, who gained access to the Internet’s riches for the first time.

total-us-wireless-bandwidth-2000-08

Meanwhile, Sen. Herb Kohl of Wisconsin is egging on Justice and the FCC with a long letter full of complaints right out of the 1950s. He warns of consolidation and stagnation in the dynamic, splintering communications sector; of dangerous exclusive handset deals even as mobile computers are perhaps the world’s leading example of innovative diversity; and of rising prices as communications costs plummet.

Kohl cautioned in particular that text message prices are rising and could severely hurt wireless consumers. But this complaint does not square with the numbers: the top two U.S. mobile phone carriers now transmit more than 200 billion text messages per calendar quarter.

It’s clear: consumers love paid text messaging despite similar applications like email, Skype calling, and instant messaging (IM, or chat) that are mostly free. A couple weeks ago I was asking a family babysitter about the latest teenage trends in text messaging and mobile devices, and I noted that I’d just seen highlights on SportsCenter of the National Texting Championship. Yes, you heard right. A 15 year old girl from Iowa, who had only been texting for eight months, won the speed texting contest and a prize of $50,000. I told the babysitter that ESPN reported this young Iowan used a crazy sounding 14,000 texts per month. “Wow, that’s a lot,” the babysitter said. “I only do 8,000 a month.”

I laughed. Only eight thousand.

In any case, Sen. Kohl’s complaint of a supposed rise in per text message pricing from $.10 to $.20 is mostly irrelevant. Few people pay these per text prices. A quick scan of the latest plans of one carrier, AT&T, shows three offerings: 200 texts for $5.00; 1500 texts for $15.00; or unlimited texts for $20. These plans correspond to per text prices, respectively, of 2.5 cents, 1 cent, and, in the case of our 8,000 text teen, just .25 cents. Not anywhere close to 20 cents.

The criticism of exclusive handset deals — like the one between AT&T and Apple’s iPhone or Sprint and Palm’s new Pre — is bizarre. Apple wasn’t even in the mobile business two years ago. And after its Treo success several years ago, Palm, originally a maker of PDAs (remember those?), had fallen far behind. Remember, too, that RIM’s popular BlackBerry devices were, until recently, just email machines. Then there is Amazon, who created a whole new business and publishing model with its wireless Kindle book- and Web-reader that runs on the Sprint mobile network. These four companies made cooperative deals with service providers to help them launch risky products into an intensely competitive market with longtime global standouts like Nokia, Motorola, Samsung, LG, Sanyo, SonyEricsson, and others.

As The Wall Street Journal noted today:

More than 30 devices have been introduced to compete with the iPhone since its debut in 2007. The fact that one carrier has an exclusive has forced other companies to find partners and innovate. In response, the price of the iPhone has steadily fallen. The earliest iPhones cost more than $500; last month, Apple introduced a $99 model.

If this is a market malfunction, let’s have more of them. Isn’t Washington busy enough re-ordering the rest of the economy?

These new devices, with their high-resolution screens, fast processors, and substantial 3G mobile and Wi-Fi connections to the cloud have launched a new era in Web computing. The iPhone now boasts more than 50,000 applications, mostly written by third-party developers and downloadable in seconds. Far from closing off consumer choice, the mobile phone business has never been remotely as open, modular, and dynamic.

There is no reason why 260 million U.S. mobile customers should be blocked from this onslaught of innovation in a futile attempt to protect a few small wireless service providers who might not — at this very moment — have access to every new device in the world, but who will no doubt tomorrow be offering a range of similar devices that all far eclipse the most powerful and popular device from just a year or two ago.

— Bret Swanson

Posted in: Innovation, Mobile, Web , Tagged: , , ,

Quote of the Day

July 7, 2009 ,

“There’s also no denying that these distribution deals have benefited consumers. More than 30 devices have been introduced to compete with the iPhone since its debut in 2007. The fact that one carrier has an exclusive has forced other companies to find partners and innovate. In response, the price of the iPhone has steadily fallen. The earliest iPhones cost more than $500; last month, Apple introduced a $99 model.

“If this is a market malfunction, let’s have more of them. Isn’t Washington busy enough re-ordering the rest of the economy?”

— The Wall Street Journal, July 7, 2009

Posted in: Quote of the Day , Tagged: ,

Bandwidth Boom: Measuring Communications Capacity

June 24, 2009 ,

See our new paper estimating the growth of consumer bandwidth – or our capacity to communicate – from 2000 to 2008. We found:

  • a huge 5,400% increase in residential bandwidth;
  • an astounding 54,200% boom in wireless bandwidth; and
  • an almost 100-fold increase in total consumer bandwidth

us-consumer-bandwidth-2000-08-res-wireless

U.S. consumer bandwidth at the end of 2008 totaled more than 717 terabits per second, yielding, on a per capita basis, almost 2.4 megabits per second of communications power.

Posted in: bandwidth, Exaflood, Internet, Mobile, Video, Web , Tagged: , ,

Medical Miracles Needed

November 9, 2008 ,

Intel is ramping its health care strategy with new hardware and software to help home-bound patients. Mobile giant Qualcomm has an array of new ideas for dis-aggregating today’s hefty, expensive, purpose-built machines that only do one or two things into a web of sensors, software, and wireless links. Think “body area network,” or BAN. Both companies are members of the Continua Alliance, a group of companies creating a “connected personal health ecosystem” of interoperable medical technologies. 

This is just the type of medical innovation I wrote about in Friday’s Wall Street Journal — the kind that will transcend many of today’s debates about who is going to pay for the old system. My answer: Nobody will pay for the old system. Create a new system.

Posted in: Health Care, Innovation, Medicine , Tagged: , , , , ,