LTE was envisioned as an all IP system, but the RF allocations follow the voice-centric approach of earlier generations. While LTE standards allow for either Frequency Division Duplexing (FDD) or Time Division Duplexing (TDD), all initial LTE equipment uses FDD. FDD requires two separate blocks of spectrum—one for each direction. FDD makes perfect sense for bi-directional voice traffic. It makes no sense for data. With the exception of peer-to-peer file sharing (which most mobile operators block), data traffic is very asymmetric. Sending data via FDD means one block of spectrum is fully utilized and the other, equal sized block, is dramatically under utilized. Result: the operator pays for almost twice the spectrum they actually use.

Verizon is deploying LTE in the 700 MHz C block which means they are using 746 MHz to 756 MHz (a 10 MHz channel) for their downlink (to the mobile device) and wasting most of 777 MHz to 787 MHz (another 10 MHz channel) for the uplink. If Verizon could deploy TDD (as used by WiMAX and as defined for LTE but not implemented), they could fully utilize both 10 MHz blocks for data transfers, almost doubling their data capacity.

I don't know the actual capacity Verizon will realize on average with their first generation LTE infrastructure. But suppose Peter Rysavy is correct (as implied by Gigaom) that Verizon will initially average 15 Mbps per 10 MHz channel. That's 15/15 Mbps, symmetric, even though average traffic is likely to be 15/2 Mbps. No single user is likely to see 15 Mbps; rather that 15 Mbps is shared among all users in that sector. With TDD (the default for WiMAX and an unimplemented option for LTE), the Verizon spectrum could support two channels of perhaps 13/2 Mbps each in that same sector. Again, no single user will see 13 Mbps, but all the users in the cell will be sharing 30 Mbps of capacity that can be dynamically divided between up and down—mostly like averaging 26/4 Mbps but able to allocate 15/15 or 28/2 as the traffic mix changes.

It's ironic the LTE implementors got this wrong when you consider their decision to use only IP in the rest of the LTE design, thereby dropping support for traditional voice or SMS services. That's right, initial LTE deployments won't support voice telephony or SMS messages, only data services, and yet LTE spectrum assignments were made as if voice comes first.

That's ironic.

Written by Brough Turner, Founder & CTO at Ashtonbrooke; Chief Strategy Officer at Dialogic

In light of past FCC practice and the behavior of incumbent wireless carriers I expect two anticompetitive outcomes to occur with the onset of any more spectrum. To maximize current contributions to the national treasury the FCC won't likely encumber any spectrum with open access requirements much less reserve some of the new spectrum for new bidders. Years ago the FCC removed a spectrum cap on any single carrier ostensibly to enable to improve service and accrue scale economies. We can expect the Big Four incumbent wireless carriers, now sharing over 90% market share, to acquire most of the spectrum.

In the 700 MHz spectrum auction (reallocation of UHF television spectrum) AT&T and Verizon spent $16 billion of the $19.6 billion collected by the U.S. government:

"According to an analysis by The Associated Press, the two telecom companies bid more than $16 billion, constituting the vast majority of the overall $19.6 billion that was bid in the FCC auction. With Verizon Wireless and AT&T dominating the auction so completely, hopes that the auction would allow for the creation of a new nationwide wireless service provider were dashed." W. David Gardner, Verizon, AT&T Big Winners in 700 MHz Auction, Information Week (March 20, 2008, Link); see also, Saul Hansell, Verizon and AT&T Win Big in Auction of Spectrum, The New York Times (March 21, 2008, Link); FCC, Auction 73, 700 MHz Band, Fact Sheet (Link)

Can anyone refute the conclusion that as incumbent carriers control more spectrum, the prospects for market entry and commensurately greater competition wanes? Regardless whether incumbent carriers warehouse the spectrum, or put it to immediate use, their opportunity to consolidate market control grows. Who would have the financial and management resources to take on the incumbents?

So 4 is the highest number of facilities-based carriers we can expect for many markets. If you think a regional carrier or pre-paid reseller can match the expanding service wingspan from the Big Four, think again.

Written by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

Although I didn't attend, this week's Mobile World Congress seemed like a fitting stage for news of this nature. Until only recently, has it been remotely plausible to consider such different companies joining forces. I've written about Skype often, and for the most part, they've been a threat for incumbents of all stripes. To hear about this from Verizon during such a public event makes it very clear that the sands are shifting once more, and yet again, VoIP is the culprit.

Skype has upset another apple cart, but I'm more inclined to put a positive spin on things, and say the opposite. No doubt the golden egg of wireless is poised to go the way of the RBOCs in the wireline world, and that's not good for the major mobile operators. On the other hand, this trend is inevitable, and in time, all mobile voice calls will be IP, running over a data network. Service providers are well aware of the risks of waiting too long, where either an established asset becomes a liability, or they miss the boat the first time around.

Think about the wireline incumbents, who of course, were the last to embrace VoIP. They've hung on too long, and that market is going away either to cablecos or wireless. We all know that today's youth will never have landlines, so there really is no future in this market. Think about how Verizon Wireless turned down the iPhone, and what a winner it's been for AT&T. Verizon Wireless has a pretty healthy business, but they've never had an answer for Apple.

Skype, on the other hand, has its own challenges. Having gone to Silver Lake, they have debt to manage now. Their growth story is still intact, but the business model has inherent limitations, and this has led them to seek closer ties with service providers. The business market could be a great opportunity for them, but they need carrier partners to really make this work. They absolutely need to grow beyond the desktop, and their efforts to date have been moderately successful, but a far cry from being a real growth driver.

I am sure you can see where this is going. Verizon and Skype both have needs, and face some common enemies. They are hardly complementary and have no warmth in their history. However, when long term survival is at stake, you can rationalize anything, and at face value, its news on Tuesday makes good business sense. Verizon gets access to Skype's huge global community, which they expect will be a great driver of data traffic over their 3G network.

Also, with Skype being mostly a voice service, you don't need an iPhone to use it. Any smartphone will do, so in lieu of offering the iPhone, Verizon can now create a distinct value proposition built around the smartphones they want to offer. This may not totally neutralize AT&T's handset advantage, but it gives Verizon a different advantage that comes by not being an Apple partner.

With Skype, Verizon has more levers to control the overall value proposition, and not be held hostage to the demands of Apple, who have radically shifted the traditional balance of power between operators and handset vendors. I would argue that this matters to Verizon, especially when all evidence points to the superiority of their network over AT&T. An example of this control is the fact that Verizon's deal with Skype precludes the use of WiFi. This ensures that Skype calls are routed over their network and not someone else's. It's not clear how long they'll be able to uphold this, but for now, it helps make their data plan more attractive, hopefully to the point where people will think twice about going to AT&T just for the iPhone.

Interestingly, Skype's deal is not exclusive to Verizon, as they do have an iPhone app with AT&T, so they actually get the best of both worlds. However, with Verizon, they get an instant bolt-on to a huge subscriber base and integration with every top smartphone not made by Apple. We don't know the revenue sharing details, but I have no doubt the financial upside is attractive for Skype. It's also not clear how using Skype for IM will impact Verizon's SMS revenues - which could be substantial—but I'm sure they'll figure this one out.

Thinking more strategically, Apple may be the coolest tech brand ever, but Skype has cachet too, and Verizon knows this is a great way to gain overnight credibility with the youth market, as well as business users (and their addictive BlackBerrys), both of which are heavy Skype users.

I'm keeping this analysis high level, mainly because the details would make this a very long piece, and they've been dissected extensively by bloggers who followed this minute-by-minute. There are many items I haven't touched on here, but from my view, I'd say both companies come out as winners.

Skype brings more to Verizon than to AT&T and the iPhone, and the longer mobile operators ignore VoIP, the more they stand to lose. Sure, those long distance and roaming charges will be hard to give up, but they won't disappear entirely any time soon. More importantly, anyone using mobile broadband knows there are cheaper ways to make phone calls, and customer goodwill will turn into goodbye if carriers stand still.

With IP, the economics of voice change big time, and there's no turning back. What happened to wireline will be repeated with wireless, and this news with Skype and Verizon is a major inflection point in the evolution of mobile. The iPhone was a big one for sure, but I think this will be bigger as it will cause every mobile carrier to rethink their core business plans. It will be very interesting to see who makes the next move, and how they will respond, and you can be sure I'll have something to say about it soon after.

Written by Jon Arnold, Principal, J Arnold & Associates

Like many, I have bought the view that voice communications has become a software application that rides on top of any wireline or wireless link. As such, the downward trend line for telephony approaches zero, right? Yes, if subscribers abandon their voice minutes of use plans that start at about $45 for 450 minutes a month. But no if subscribers keep the voice plan and add the $30 or higher data plan.

There was a time when wireless carriers mandated the bundling of a voice plan for the privilege of adding a data plan. Absent such compulsory bundling, Verizon must have confidence that consumers will opt to keep the user friendly voice option. This assumption makes sense particularly if wireless carriers expect to replace unmetered, "all you can eat" data plans with several tiers of monthly throughput baskets.

Cable television operators did not have such confidence that their subscribers would add service tiers rather than cherry pick. By law cable operators must provide subscribers with some "buy through" opportunities.

With a future data dominant, but tiered service environment, users may consider it prudent to keep their voice minutes on a voice plan to conserve their available megabytes for nonvoice services. Under this scenario, efficient pricing plans trump visions of convergence and zero cost voice.

Written by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

Off the record, two of the best engineers in the world have confirmed to me that's perfectly plausible. It corresponds to my research, an FCC conclusion, and what John Stankey of AT&T is telling investors.

Campbell calculates it costs less than $3/month for a gigabyte of added capacity, falling. If the average "unlimited" (really 5 gig) customer uses about 1 ½ gig (a likely average), that means a carrier collecting $20-50/month needs to spend about $5 of that for the bandwidth.

It should fit in a capex budget similar to todays and will drop with Moore's Law.

An important point is that the carriers can essentially control the bandwidth demand by plans and pricing. If they stay with today's 5 gigabyte cap or even double it, the numbers work. Behind the higher estimates for 2012-2015 is an implicit assumption that carriers will raise double their caps every two years and be at 20-40 gigabytes for the almost all customers. That's unlikely.

Those caps will limit the use of wireless for folks who want to watch all their TV over the net. It is therefore only a partial substitute for landlines, so I believe most families will maintain both. With a landline in most homes, 30-50% of wireless traffic can be diverted to femtos and WiFi. Vodafone and AT&T are well along making that happen, especially as femto prices drop to $50 and eventually $20. They pay for themselves just with the spectrum savings. Vodafone is already giving them out for free as part of the bundle and 2Wire has promised gateways with femtos inside.

While some of his conclusions are U.S. centric, most of his data applies across the world. Glen is Merrill's world lead on telecom and he has some conclusions about both the emerging and developed world. He has long been acknowledged as one of the dozen best in the world. This report is the most interesting I've seen in a while. It should be available through the standard investor databases but unfortunately is not public.

There are predictable technology shifts like double or triple capacity in 3G/4G, huge IP voice efficiencies that will free up spectrum used for voice today, mass deployment of WiFi phones and/or femtocells.

My guess is we probably can go a decade without a serious problem based on some almost certain FCC moves. Improved spectrum use is the most important part of the broadband plan, as I wrote more than a year ago.

Written by Dave Burstein, Editor, DSL Prime

We learned from The Wall Street Journal yesterday that "Federal Communications Commission Chairman Julius Genachowski gets a little peeved when people suggests that he wants to regulate the Internet." He told a group of Journal reporters and editors today that: "I don't see any circumstances where we'd take steps to regulate the Internet itself," and "I've been clear repeatedly that we're not going to regulate the Internet."

We're thankful to hear Chairman Julius Genachowski to make that promise. We'll certainly hold him to it. But you will pardon us if we remain skeptical (and, in advance, if you hear a constant stream of "I told you so" from us in the months and years to come). If the Chairman is "peeved" at the suggestion that the FCC might be angling to extend its reach to include the Internet and new media platforms and content, perhaps he should start taking a closer look at what his own agency is doing—and think about the precedents he's setting for future Chairmen who might not share his professed commitment not to regulate the 'net. Allow us to cite just a few examples:

Net Neutrality Notice of Proposed Rulemaking

We're certainly aware of the argument that the FCC's proposed net neutrality regime is not tantamount to Internet regulation—but we just don't buy it. Not for one minute.

First, Chairman Genachowski seems to believe that "the Internet" is entirely distinct from the physical infrastructure that brings "cyberspace" to our homes, offices and mobile devices. The WSJ notes, "when pressed, [Genachowski] admitted he was referring to regulating Internet content rather than regulating Internet lines." OK, so let's just make sure we have this straight: The FCC is going to enshrine in law the principle that "gatekeepers" that control the "bottleneck" of broadband service can only be checked by having the government enforce "neutrality" principles in the same basic model of "common carrier" regulation that once applied to canals, railroads, the telegraph and telephone. But when it comes to accusations of "gatekeeper" power at the content/services/applications "layers" of the Internet, the FCC is just going to step back and let markets sort things out? Sorry, we're just not buying it.

Chairman Genachowski may sincerely believe that a clear, bright line can be drawn between the "infrastructure layer" (which he's certainly going to regulate) and what he likes to think of as "the Internet" (which he promises not to regulate). But as we warned last October, the day after the FCC launched this NPRM:

The promise made yesterday by the FCC—to only apply neutrality principles to the infrastructure layer of the Net—is hollow and will ultimately prove unenforceable. The reality is that regulation always spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract… The basic premise of neutrality regulation is already being proposed for other layers of the Internet.... whatever the FCC might say today, any large online intermediary with a popular platform potentially faces the threat of "network neutrality" mandates—because every platform is essentially a "network," too. We're not just talking about "search neutrality" (Google as well as Microsoft) but also about "device neutrality" (mobile handsets), "app neutrality" (Apple's iTunes store, Facebook's developers and Google's Android mobile OS) and so on for social networking, email, instant messaging, online advertising, etc.

We explained how the intellectual foundations for this regulatory creep have already been laid by groups like Free Press and Public Knowledge and law professors like Columbia's Tim Wu (father of "Net Neutrality"), Harvard's Jonathan Zittrain (father of "API/device Neutrality"), and Seton Hall's Frank Pasquale (father of "Search Neutrality"). Joining this intellectual vanguard of Internet regulation is George Washington law school professor Dawn Nunziato, whose new book, Virtual Freedom: Net Neutrality and Free Speech in the Internet Age, is a veritable manifesto for expansive neutrality regulation (especially of Google)—and how the First Amendment ("Congress shall make no law...") should be twisted not just to allow such regulation of speech platforms, but to require it! Even Wu, whose work blazed a trail for these others, is pretty clear about the breadth of his original vision for "neutrality" regulation, as his popular Net Neutrality FAQ makes clear:

The promotion of network neutrality is no different than the challenge of promoting fair evolutionary competition in any privately owned environment, whether a telephone network, operating system, or even a retail store. Government regulation in such contexts invariably tries to help ensure that the short-term interests of the owner do not prevent the best products or applications becoming available to end-users.

Zittrain, Pasquale, and Nunziato don't pull any punches either: They don't shy away from flirting with nebulous neutrality definitions and wide-ranging government powers to regulate. So we don't have to imagine what the "slippery slope" might look like: There are plenty of very smart and highly influential legal academics out there hard at work sketching out precisely where the path Chairman Genachowski has started us down will ultimately lead.

It's no less clear why we'll wind up marching down that path, no matter what the current FCC leadership intends.

1. The current net neutrality rulemaking sets a profoundly dangerous legal precedent of essentially unlimited claims of "ancillary jurisdiction": As our friends at the Electronic Frontier Foundation (who have a soft spot for net neutrality in theory) put it, "If 'ancillary jurisdiction' is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won't like)." Our PFF colleague Barbara Esbin carefully dissected this issue for the Commission in her recent filing in this proceeding.
2. As explained above, the general regulatory principle of controlling "gatekeepers" doesn't end with infrastructure.
3. As EFF notes, "Experience shows that the FCC is particularly vulnerable to regulatory capture."
4. Now that FCC has opened the door to micro-managing online business practices in the name of "neutrality," the companies that have made America the leader in the Digital Revolution are already turning on each other in a dangerous game of brinksmanship, escalating demands for regulation and playing right into the hands of those who want to bring the entire high-tech sector under the thumb of government—under an Orwellian conception of "Internet Freedom" that makes corporations the real "Big Brother," and government, our savior.

This strategy of political escalation will thus quickly steamroll over whatever promises made today to narrowly cabin the principle of neutrality regulation—and end in "Mutually Assured Destruction." That's why we referred to the day the FCC started down this path back in September as "The Day Internet Freedom Died."

If that title sounds melodramatic, take a step back and consider that, back in 1996, Congress decided to enshrine in law the principle that the Internet is different from traditional media: Apart from an ill-considered effort to censor online indecency and obscenity (which was quickly struck down by the Supreme Court as unconstitutional) and the enforcement of intellectual property and criminal laws, Congress decided to take a purely laissez-faire approach to the Internet. As Barbara reminded the Commission in her net neutrality filing, "Section 230(b)(2) flatly declares that it is the policy of the United States ― to preserve the vibrant competitive free market that presently exits for the Internet and other interactive computer services, unfettered by Federal or State regulation."

So Chairman Genachowski's decision to revert to the common carrier model of the railroad era marks a fundamental break with the approach Congress decided we would take to the Internet. The DC Circuit will likely soon rule that the FCC has vastly overstepped its authority in trying to set Internet policy without any clear grant of authority from Congress to do so.

Wireless Innovation & Investment Notice of Inquiry

In fact, the same kind of thinking is already being extended by this FCC in a number of other arenas using a flurry of innocuous-seeming "Notices of Inquiry." While these notices purport only to ask questions, they either:

1. Foreshadow where the Commission intends to go in proposing new regulations based on its nearly limitless conception of its own regulatory authority;
2. Are intended to pressure Congress to give the agency more statutory authority; or
3. Are intended to intimidate industry into "playing ball" so the FCC won't actually have to stick its neck out by trying to write rules to regulate Internet activities that are clearly beyond its existing authority and might well be unconstitutional even if Congress ever did expand that authority.

Exhibit A is the language in the Commission's August 2009 Wireless Innovation and Investment Notice of Inquiry, (paragraph 60, pg. 21) that suggests the FCC is angling to become the Federal Cloud Commission:

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

Good morning, Google! Hello, Facebook! Is anyone out there in the cloud listening to the rumbling thunder of federal regulation? What began as academic theory in a law school ivory tower is coming soon to a regulatory agency near you! But wait… there's more!

National Broadband Plan Public Notice #21 (Cloud Computing)

Last November, as part of the Commission's ongoing effort to develop a National Broadband Plan, the FCC released a request for information "on data portability and its relationship to broadband." (NBP Public Notice #21) "The Commission seeks tailored comment on broadband and portability of data and their relation to cloud computing, transparency, identity, and privacy," the notice says. Here was the second item on the list of things the Commission said it was investigating (p. 2):

When considering the portability of data, we also consider the processes through which data are moved. In this context, we seek comment on how to identify and understand cloud computing as a model for technology provisioning.... What types of cloud computing exist (e.g., public, hybrid, and internal) and what are the legal and regulatory implications of their use? ... To what extent are consumers protected by industry self-regulation (e.g., the Cloud Computing Manifesto), and to what extent might additional protections be needed? ... What specific privacy concerns are there with user data and cloud computing? What precautions should government agencies take to prevent disclosure of personal information when providing data? Is the use of cloud computing a net positive to the environment? Are there specific studies that quantify the environmental impact of cloud computing?

We suppose some might claim there's nothing wrong with the FCC looking into these issues, and that the agency's interest in cloud computing is entirely benign. (Never mind the fact that the Federal Trade Commission already enforces the privacy policies of cloud computing providers and is looking hard at online privacy.) Seeing all these open-ended questions about something so obviously beyond the scope of the FCC's authority just makes the potential for—and perhaps even inevitability of—regulatory creep hard to miss. Eventually, when a regulatory agency asks enough questions, especially the sort of questions highlighted above… well, to paraphrase Master Yoda:

Open-ended inquiries about new regulations are the path to the Dark side.

Inquiries lead to agency oversight.

Agency oversight leads to regulation.

Regulation leads to suffering for innovators and consumers alike.

Again, we're not just inventing bogeymen here. It's quite clear that regulatory advocates want to take neutrality regulation into "the Cloud." As Jason Lanier, author of the popular book You Are Not a Gadget summarizes one of his key themes:

While there is a lot of talk about networks and emergence from the top American technologists, in truth, most of them are hoping to thrive by controlling the network that everyone else is forced to pass through. Everyone wants to be a "Lord of a Computing Cloud."

In Lanier's dystopia of techno-feudalism, the Lords oppressing the poor digital "peasants" certainly aren't just those running broadband service providers. It's the Google, Facebooks, and Twitters of the world. It's similar to the "sharecropper" concern raised by Nick Carr in his book The Big Switch. Complaints like those will only grow in the years to come, and few will buy—or even pause to remember—the distinction Chairman Genachowski seems to stand on now between infrastructure and "the Internet."

National Broadband Plan Public Notice #29 (Privacy)

The "Recovery Act" passed in January 2009 tasked the FCC with formulating "a detailed strategy for achieving affordability of such service and maximum utilization of broadband infrastructure and service by the public." The FCC seized this as an opportunity to solicit suggestions as to how regulate the use and collection of data by the private sector on the grounds that concerns about privacy might somehow be slowing broadband adoption.

Chairman Genachowski's flurry of open-ended inquiries about new regulation are clearly intended to give a bully pulpit to regulatory advocates to demand that the FCC issue the very sort of Internet regulations the Chairman purports to abhor (or that Congress give the agency authority to do so). But most of these notices at least appear to be objective requests for comments written independently of the groups the Commission seems so eager to hear beg for Internet regulation. But in this case, the Commission dispensed with that tedious formality and just outsourced the writing of the inquiry itself to one of the outside groups clamoring the loudest for data regulation in the name of "privacy": our friends at the Center for Democracy & Technology, with whom PFF has worked closely on many free speech issues in the past.

CDT is on to something when they write that "Consumers will not embrace broadband if they have a sense that everything they do online will be watched by government officials." We'll join with them in the fight to protect consumers' privacy from the Real Big Brother—government!—but once again, as with net neutrality, advocates of regulation see government as the protector of our digital liberties (if only we can forever make sure noble civil-libertarians are in charge of the regulatory apparatus of the state!). So CDT has it exactly backwards when they say: "Consumer privacy concerns encompass not only what companies do with their data, but also the extent to which the government accesses it." And instead of just suggesting that the FCC's National Broadband Plan include a recommendation that Congress clean up the antiquated laws intended to limit government surveillance, CDT pushes for sweeping regulations that would affect the ability of most online services and sites to collect and use the data they need to improve their services, innovate, and maybe even try to make some money on advertising to support all the free content and services they give away.

Thus, instead of focusing on the clear harm from government, the FCC's outsourced inquiry goes after online operators as "privacy proxies" for concerns about government action. At least Congress actually asked for the FCC's recommendations in this case, unlike all the other inquiries the agency has launched sua sponte. But as Berin noted in his comments on this inquiry, the Recovery Act allowed the FCC to "recommend only those policies that it concludes will, on net, help achieve "affordability" and 'maximum utilization' of broadband." That means the Commission would actually have to consider the many trade-offs inherent in the private sector use of data before recommending regulation: If the Internet ecosystem is impoverished by government intervention, however well-intentioned it may be, users will have that much less reason to adopt and "utilize broadband." So the FCC would have a lot of cost-benefit analysis to do before it could actually make the kinds of regulatory recommendations CDT wants. And we suspect that, on the whole, that analysis wouldn't turn out the way CDT thinks it would.

Child Safe Viewing Act Notice of Inquiry

In a somewhat similar vein, Congress last year asked the agency to examine how well parental control technologies work to allow parents to filter objectionable content online. So while the FCC may have had, for once, the authority to ask broad questions, it's startling just how broad those questions were. The Commission obviously has no authority over video games or virtual worlds, online video distribution networks or video hosting sites, mobile web content, MP3 players or iPods, P2P networks, VCRs or DVD players, PVRs or TiVo, Internet filters, safe search tools, laptops, and so on. And yet, all these things (and much more) were mentioned in the Commission's Child Safe Viewing Act Notice of Inquiry.

The proceeding raises the prospect of what Adam has called "convergence era content regulation” since it opens the doors to FCC meddling on a number of new fronts in the name of "protecting children." Although the Commission's final report to Congress stopped short of calling for an substantive expansion of the agency's content regulatory regime, it teed up another proceeding, discussed next. (And if Congress hasn't moved more quickly to grant the FCC new power in this area, it's probably because they're busy trying to figure out how to get around a line of First Amendment cases that consistently require government regulation to yield to "less restrictive" alternatives like parental control tools and education.)

Empowering Parents & Protecting Children Notice of Inquiry

This wide-ranging inquiry reads like the ultimate "fishing expedition" by a regulatory agency—fishing for new jurisdictional authority to regulate, that is! The questions asked are too broad, far-flung and various to catalog here (we'll have a big filing coming in the matter soon), but the Commission asks about extending to Internet media the model of the 1990 Children's Television Act, which imposes "public interest" obligations on broadcasters and cable operators to offer "education" content while also strictly limiting how much advertising may be shown during children's TV. The Commission also alludes, ominously, to the V-chip model for requiring universal ratings for television and hints that it would really like for "current laws [to] be updated to reflect this convergence and to keep pace with changes in technology" (¶ 41).

The Commission mentions only in passing at the very end of the Inquiry that it "has varying degrees of statutory authority with respect to different media. We ask commenters, in proposing any action, to discuss the source and extent of the Commission's authority to take the action, or whether new legislation would be needed to authorize such action" (¶ 58). Translation: "Uh, yeah… so… we know we don't have a statutory leg to stand on here, but we think it'd be really cool if we did, so let's just all, you know, kinda brainstorm about what kind of regulation we could be imposing here and what kind of law we'd need get Congress to pass to make it all legal. Or if you have any creative ideas on how we could get away with just making up the jurisdiction thing on our own, that'd be even better!"

YouTube, you're first on the list of targets for the kind of online video regulation the FCC is hinting at here—and none too subtly. But why stop there? The FCC's laundry list of complaints aren't limited just to video, but could apply to essentially all online media. But this is all in the name of "protecting the children," and Chairman Genachowski doesn't want to regulate the Internet, so we really don't need to worry—right?

Future of Media Notice of Inquiry

Most recently, in late January, the Commission launched the ambitiously-named "Examination of the Future of Media and Information Needs of Communities in a Digital Age." The FCC asks a number of good questions about how government could get out of the way of media struggling to reinvent themselves in the digital era by scrapping outdated regulations. The inquiry also tips its hat to the vital importance of advertising in supporting media. But it's otherwise pretty bad news as a harbinger of a "Chill Wind" for the future of a free press in this country, as Ken Ferree, PFF's former president and current board member noted.

In particular, the Commission comes right out with a "trial balloon" about imposing public interest obligations on online operators—the very thing it hinted at slightly more delicately in the "Empowering Parents" inquiry mentioned above:

Broadcasters have certain public interest obligations, including that they provide programming responsive to the needs and issues of their communities and comply with the Commission's children's programming requirements. Cable and satellite operators have their own responsibilities… Should such obligations be applied to a broader range of media or technology companies, or be limited in scope?

OK, so we're not going to "regulate" online content operators; we're just going to impose "public interest" obligations on them to provide certain kinds of content preferred by politicians. Right… and if Google News or YouTube don't do enough to "serve the public interest," what then? Will the Federal Search Commission take away Google's search license or cloud computing license?

Of course, we don't mean to suggest that even the "Federal Cloud Commission" would ever be so unsubtle as to create a formal licensing system when they can probably achieve the same ends with far less obvious regulation. But how is this all going to work, exactly? Again, this is exactly the kind of hopelessly vague regulatory morass Congress had in mind when it declared that the federal government would avoid "fettering" the "vibrant competitive free market ... for the Internet and other interactive computer services" with regulation.

The FCC goes on to revive the kinds of broad net neutrality ideas discussed above in asking:

How would policies related to "open Internet" or "universal broadband" or other FCC policies about communications infrastructure affect the likelihood that the Internet will meet the information needs of communities? Are there search engine practices that might positively or negatively affect web-based efforts to provide news or information?

In other words, "Tell us why and precisely how we should start regulating search engines in order to help 'save news.'" Google, here's looking at you, kid! You want to keep your search license, dontcha? Well, just do what the nice men from Washington want and there won't be any trouble.

Finally, the Commission opens the door to the noxious proposal for a "public option" for media, which Adam has lambasted. Here's what the Commission says:

In general, what categories of journalism are most in jeopardy in the digital era? What categories are likely to flourish? While much is still to be determined as media companies test various business models and payment approaches in the coming years, based on what is known now, are there news and information needs that commercial market mechanisms alone are unlikely to serve adequately?

Don't worry, it's not as if government will exercise control over the media companies it funds if the media-socialist fantasies of the neo-Marxist Robert McChesney and his ironically-named "Free Press" group actually come true. Nope, government's just here to help!

We'd all do well to remember that subsidies always come with strings attached—namely, regulation. That's the Golden Rule: "He who has the gold, makes the rules!"

Conclusion

Chairman Genachowski, with all due respect, if you don't like people suggesting that the FCC may be positioning itself to regulate the Internet and digital media platforms, then you might want to take a careful look at what your agency has been doing. You should think hard both about the precedents that will be set by "neutrality" regulation for online content and services, and also about the quasi-regulatory effect that your agency's flurry of open-ended inquiries will have on the operators you claim not to want to regulate.

What will future Chairmen do with these precedents? What will emerge from every "Pandora's Box" you've opened with each new sweeping inquiry? The answer, we fear, is an endless parade of new Internet regulations—and the death by a thousand cuts of real Internet freedom.

Cross-posted from the Technology Liberation Front

Written by Berin Szoka, Senior Fellow, The Progress & Freedom Foundation

(At least) two solutions are on the table, Femtocells and Wi-Fi offload. Both approaches solve the backhaul issue by using customer or 3rd party links (DSL, DOCSIS, T1/E1, WISP or otherwise).

Femtocells are tiny mobile cellsites using the mobile operators' licensed spectrum, supporting all handsets and all services. Thus femtocells are a great way to extend coverage. If you want mobile voice service in a place where macrocell coverage is poor, a femtocell could be ideal. However, that's the only place where femtocell's have the advantage.

As a solution for mobile data capacity, Wi-Fi wins, for many reasons.

First, most mobile data is destined for the open Internet, not for someplace on the mobile operator's network. Multiple actual measurements of live traffic in different countries show 96%-99% of all bytes passed over the mobile data channel are destined for the Internet.

The mobile operator's NGN mobile core network is a complex network designed to support differential services, fine-grained billing and so forth. This makes it significantly more expensive than a best efforts network like the Internet and yet, no operator has found a way to charge for this extra capability—people just want to get to the Internet.

Femtocells are part of this complexity, and cost.

Second, the primary sources of mobile data demand are laptops, notebooks and smart phones. Laptops and notebooks have Wi-Fi connectivity. Half of smart phones have Wi-Fi already and the percentage is rising rapidly. So the major demand comes from devices that can connect to either femtocells or Wi-Fi hotspots. Thus the only potential disadvantage of Wi-Fi hotspots is gone or rapidly vanishing.

Third, Wi-Fi access points cost less than femtocells. Besides being somewhat simpler, they are being produced in very high volumes, far higher than the mobile operators are likely to achieve with femtocells. Femtocells might have made sense when they were first conceived, but today Wi-Fi has changed the landscape which leads us to…

Fourth, Wi-Fi access points are showing up everywhere. People are installing them in their homes but we also see Wi-Fi coverage in enterprises, in retail establishments and in public places.

Individuals spend most of their online time in just two locations: home and the office. Enterprises will not install Femtocells as the IT department can't control them. Consumers, retail and public locations have already done or are doing Wi-Fi. They won't install femtocells unless there is some form of subsidy from the operator—another cost with no net benefit.

Summary:

Femtocells will flop. They do provide a way to extend voice coverage into homes that macro cells don't reach, but they are not efficient for data offload. Since Wi-Fi is efficient for data offload, and it costs less to buy and less to operate, Wi-Fi will trump Femtocells.

What should an operator do?

Mobile operators need to focus on providing bundles of connectivity, not on whether its 3G/4G or Wi-Fi. They should be encouraging Wi-Fi offload by bundling "free" public Wi-Fi access with their mobile data plans.

In the long term, it's likely most mobile data bytes will go over Wi-Fi. The 3G/4G network is still necessary to provide a backup path when no Wi-Fi is available. Mobile operators who recognizes this can still come out on top, if they focus on facilitating connectivity for their customers regardless of the technology involved.

Written by Brough Turner, Founder & CTO at Ashtonbrooke; Chief Strategy Officer at Dialogic

At the same time the mobile subscriber markets are becoming saturated and competition is driving margins down. It is highly unlikely that consumers are going to double their mobile spend simply to get mobile broadband, because in the end consumers have a budget and, with or without broadband, that budget is suddenly not going to double in size.

Driven by these financial realities, while mobile operators are becoming increasingly interested in sharing, they are also very aware of the risks they are taking. As we have seen in Europe (see below) such activities could be seen as anti-competitive and the mobile operators, eager to keep their lucrative vertically integrated businesses going, are very much aware of the regulatory dangers involved in doing this.

It will be interesting to see how this will develop further. As we have seen with the iPhone, this device has singlehandedly changed the dynamics within the mobile industry. The market is no longer driven by what the operators dictate, but by the devices which the manufacturers and the Apps provide. The mobile content portals of the carriers failed to achieve in a decade what Apps, based on an open network environment, will achieve with leadership of the mobile content market this year. Apps revenue will overtake mobile carriers' portal revenue during the next 12 to 18 months.

This trend will result in more power being taken away from the mobile operators. It will only be a matter of time before other providers will be able to negotiate better wholesale deals with the operators and this will mean that they are then only one step away from structural separation. At the point in time when companies such as Apple, Google and leading Apps providers have gained sufficient market power, it would no longer make any financial or business sense to keep overbuilding mobile networks, so better sharing arrangements will be required to underpin the 4G mobile network investments in the future.

Australia and New Zealand

With massive investments and more competitive processes ahead of them, mobile operators in New Zealand are beginning to look at opportunities to share. Mobile operators have been at loggerheads with each other for over a decade regarding sharing facilities but recently, in the wake of heavy investment, they have been forced together to address this issue moving forward to 4G.

Australia was possibly the first country where infrastructure sharing arrangements were made between the four mobile operators. However this did not happen in the way it was envisaged, and ultimately only two providers continued to work together in a contractual arrangement where Telstra shared ownership and control of the Hutchison Radio Access Network (RAN) through 3GIS. There is a similar development in Europe.

Asia

In Asia some governments have introduced policies that require mobile operators to share passive network infrastructure. China, India, Indonesia, Sri Lanka and Bangladesh are supporting passive infrastructure sharing in order to prevent large-scale network duplication and the enormous costs involved in network build-outs.

In China, for example, operators will be required to share towers and the fibre pipes that connect the towers to base stations. The policies apply mainly to new 3G network construction, rather than existing 2G infrastructure.

In January 2010 China Telecom and China Unicom agreed to build 500 3G base stations together in Shanghai in 2010. The deal will save an estimated RMB300 million (US$43.9 million).

However, so far there have not been any announcements regarding shared 4G rollouts. Operators in Japan, the most advanced country in this market, are building them separately with the first launches expected at end-2010.

Europe

In March 2009 Tele2 and Telenor announced plans to build a joint 4G network in Sweden through Net4Mobility, a joint venture for network construction and spectrum sharing. Telenor also holds a 4G licence in Norway, where it has started testing LTE technology. The roll-out of what would be Sweden's most extensive 4G network was started in December 2009 with equipment supplied by Huawei. Mobile Internet services based on LTE should be launched at the end of 2010.

By 2013 the operators expected to cover 99% of the population, providing speeds of up to 80Mb/s in rural areas and up to 150Mb/s in urban areas. The joint network would use part of the 2×20MHz of FDD spectrum which they bought separately in 2008. The partnership would also see the two operators share existing 900MHz GSM spectrum and extend their GSM network by up to 50% to support voice services on the new network.

The trademark of the joint venture is Mobile Norway, which is the mobile network operator 50% owned by Network Norway and 50% by Tele2. Mobile Norway planned to deploy the third network in Norway with nationwide coverage on the GSM 900MHz band. It also has a 3G licence. The company signed a roaming deal with Telenor in mid-2008 (having previously been hosted by TeliaSonera), providing it with network access in areas of the country where it did not have a network.

In February 2009 Network Norway contracted Cisco to deploy a mobile Internet platform based on Cisco's IP NGN architecture, and in the following December it contracted Ericsson to build its 3G mobile broadband infrastructure with the aim of covering 75% of the population.

In September 2009 Deutsche Telekom and France entered into negotiations to combine T-Mobile UK and Orange UK in a new 50:50 joint venture company, having a combined mobile customer base of around 28.4 million, representing about 37% of the UK's mobile subscribers. The merger and integration of the two units were estimated to generate €4 billion (£3.5 billion), with annual operating cost savings of £445 million from 2014. The deal came under the scrutiny of the regulator and the EC, while the other MNOs also voiced their concern, particularly the implications for Virgin Mobile (the country's largest MVNO) which runs on T-Mobile's network and accounts for about 25% of its UK customers.

In addition, there are implications for both Vodafone and 3UK. In May 2009 O2 signed a deal with Vodafone to share infrastructure costs for passive network components across Europe. Vodafone and O2 operate in the 900MHz spectrum, meaning that sharing antennae is less problematic. Vodafone's brief network-sharing arrangement with Orange was complicated by the fact that Orange operates at 1800MHz. In 2008 T-Mobile and 3UK set up a network sharing agreement which they expected would generate cost savings of £2 billion over the following ten years. Although masts and the 3G access networks are being combined, each company's core network and T-Mobile's 2G network will not be shared.

Both parties will retain responsibility for delivering services to their customers and use their own frequency spectrum. A 50:50 joint venture company, Mobile Broadband Network (MBN), was set up to operate the joint network on behalf of both companies. Over 5,000 duplicate sites from both carriers (about 30% of the total) will be decommissioned. In August 2008 Mobile Broadband Network selected Nokia Siemens Networks (NSN) as its 3G network infrastructure supplier. NSN's radio access solution will replace most of the two operators' communications stations across the UK, while equipment at the remaining sites will be upgraded and reconfigured for higher quality and capacity.

Telecom Italia and Vodafone signed a six-year agreement in November 2007 to share their existing and future mobile network access sites. The deal renews an earlier agreement which enabled the two operators to share infrastructure such as poles, cables, electrical and air-conditioning equipment. The operators will use each other's infrastructure to help improve their network footprint without paying out for new equipment.

In July 2009 Telecom Italia and 3 Italia signed a three year network sharing agreement, affecting some 2,000 sites nationwide. Each operator will retain ownership of its network infrastructure but is required to open sites to house its partner's equipment. The agreement conforms to the 2003 Electronic Communications Code (ECC) which calls for the more efficient use of network infrastructure in urban and rural areas. The operators expect cost savings of around 30%.

Middle East

In the Middle East the only case in point I'm aware of is very minor sharing in 3G. The UAE regulator has established a committee to preside over base station arrangements between the two operators, Etisalat and du. Etisalat and du are meant to share transmitter sites but retain individual antennas.

Written by Paul Budde, Managing Director of Paul Budde Communication

My list of supreme free riders: Apple and cellular radio carriers. Anytime an Apple customer and/or a wireless carrier customer pays for and downloads content via a wi-fi connection, Apple and the carriers avoid having to pay for transport, or providing transport respectively. So Apple can get paid for a book delivered to the iPad without incurring any delivery cost. Such a deal. I have not heard that Apple will pay a gratuity to Starbucks and all the other wi-fi hotspot operators whenever a book gets downloaded "off network."

Similarly recognize that anytime a wireless carrier subscriber uses wi-fi, in lieu of the carrier's network, the carrier has avoided having to provide service. Subscribers are not conserving monthly service minutes when they use wi-fi, particularly for data downloads by all you can eat data plan customers.

Some time ago, wireless carriers required cellphone manufacturers such as Nokia to disable wi-fi access in the mistaken perception that the carrier would not benefit when subscribers avoid having to use the carriers' network. Given the sorry state of these networks in the face of vastly increasing demand, wireless carriers wised up.

Now Apple and the cellular carriers qualify as the greatest free-riders of our time.

Written by Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

The telluric shift albeit the user will not care or should not notice is that when he or she will power on that smartphone or whatever the communicating Swiss Knife will be called, it will request an IP address to complete an IP based call. A device without an IP address will be rather difficult to reach and the ungodly NATword should not even be whispered. The comfort of the good old circuit switched network core will be gone in the LTE era.

It is rather timely, if not a bit last minute, that the GCF, the Global Certification Forum, announced a LTE device certification scheme to be ready by the end of 2010.

Verizon, as far as I know, is the only mobile network Operator so far who officially announced IPv6 support in their devices and stated that " the device shall be assigned an IPv6 address whenever it attaches to the LTE network".

Verizon's commitment to IPv6 seems to be further underscored as ICSA, their independent conformity testing lab became the first one approved by NIST for USGv6 conformance testing. Congratulations, Verizon.

In the meantime, Telia Sonera claimed the world's first commercial LTE deployment in Stockholm and Oslo in December. Has anyone confirmed what kind of IP addresses they are using, IPv4 and/or IPv6? They just announced the suppliers for their LTE network extension to 29 cities in Sweden and Norway. Let us hope the Nordic countries will continue to surprise us as they have done for a long time in telecommunications.

With all the LTE plans announced lately, it should not come as a surprise to see LTE as a prime discussion topic during the Mobile World Congress in Barcelona this month. And while it will not have the starring role, IPv6 will be best supporting actor.

With the first LTE networks coming on-line later this year it will be interesting to track compliance and interoperability.

LTE should not be fragmented in too many Short Term Evolutions. The end-user community expects seamless high quality service, to them it is ancillary if is called LTE and works in IPv4 or IPv6.

Written by Yves Poppe, Director, Business Development IP Strategy

Read full story: External Source

Top 10 Featured Blogs in 2009:

1. Yahoo, Gmail, Hotmail Compromised - But How?
   by Terry Zink - Oct 08, 2009
2. A Closer Look at Iran's State of Internet, Strange Transit Changes in Wake of Controversial Election
   by Jim Cowie - Jun 14, 2009
3. WiMAX vs. LTE
   by Paul Budde - Mar 10, 2009
4. China's "Green Dam Youth Escort" Software
   by Rebecca MacKinnon - Jun 08, 2009
5. Verizon Mandates IPv6 Support for Next-Gen Cell Phones
   by Derek Morr - Jun 09, 2009
6. Cloud Computing Types: Public Cloud, Hybrid Cloud, Private Cloud
   by Sam Johnston - Mar 06, 2009
7. Can't Connect… Won't Connect
   by Bill Thompson - May 13, 2009
8. The Cybersecurity Act of 2009
   by Steven Bellovin - Apr 13, 2009
9. Google AdSense Asks Publishers to Change Their Websites' Privacy Policy
   by Dhaval Doshi - Mar 13, 2009
10. YouTube's Fine - Analysts Don't Understand Internet Peering
    by Brough Turner - Apr 16, 2009

Top 10 News in 2009:

1. Network Solutions Under Large Scale DDoS Attack, Millions of Websites Potentially Unreachable
   Jan 23, 2009
2. U.S. General Reserves Right to Use Physical Force, Even Nuclear, in Response to Cyberattack
   May 13, 2009
3. Google Cloud Storage Coming Within Weeks
   May 20, 2009
4. Finland First Country to Make Broadband a Legal Right
   Oct 14, 2009
5. SPECIAL: Updates from the ICANN Meetings in Sydney
   Jun 26, 2009
6. Google Rolling Out Its Services Over IPv6
   Jan 08, 2009
7. ICANN's President and CEO Announces Resignation
   Mar 02, 2009
8. Iran's Internet Censorship Most Sophisticated in the World
   Jun 19, 2009
9. Comcast Unleashes Trial DNS Redirection in Select States
   Jul 09, 2009
10. Latest Cybersquatting Stats from WIPO
    Mar 16, 2009

Top 10 Industry News in 2009 by sponsored posts*:

1. Facebook Selects MarkMonitor Antifraud Solutions to Combat Malware
   by MarkMonitor - Apr 30, 2009
2. .ORG First Open Top-Level Domain to be Signed with DNSSEC
   by PIR - Jun 02, 2009
3. Perspectives from a Nonprofit Domain Name Registry on Navigating the Social Media Frontier
   by PIR - Apr 24, 2009
4. Expanding Internet Access Driving Software Piracy, Study Says
   by MarkMonitor - May 22, 2009
5. A Seemingly Overwhelming Number of Important Documents Released by ICANN
   by MarkMonitor - Jun 02, 2009
6. MarkMonitor AntiFraud Solutions Combine Proven Antiphishing and Expert Antimalware Capabalities
   by MarkMonitor - Mar 23, 2009
7. DNSstuff.com Offers Trusteer Rapport Product to Help Users Boost Their Defenses Against Online Fraud
   by DNSstuff - Mar 23, 2009
8. dotMobi Names AutoTrader.mobi as Millionth Site Tested by Acclaimed mobiReady Tool
   by dotMobi - May 20, 2009
9. IP Rights in Digital Environment Key Element of Proposed Treaty
   by MarkMonitor - Apr 15, 2009
10. COCC Partners with MarkMonitor for Anti-Phishing Services
    by MarkMonitor - Mar 18, 2009

* Featured news updates from CircleID's industry participants by more information here - see 'Dedicated Marketing Channel' section

Written by CircleID Reporter

But fighting the White Space Coalition is short sighted. The NAB faces a much bigger and more powerful enemy—mobile operators.

The White Spaces Coalition merely seeks permission to use spectrum where NAB members are not using it, i.e. on a non-interference basis as "secondary users" with purely secondary rights.

The mobile industry wants it all. They'd prefer that broadcast spectrum be taken back and auctioned off for mobile use. Discussions on recapturing broadcast spectrum ramped up after an October comment by FCC broadband czar Blair Levin. For example see the transcript of this December 1st panel discussion. Or consider last week's appointment of Duke Law Professor Stuart Benjamin as the FCC's first Distinguished Scholar in Residence. Benjamin is a vocal proponent of reclaiming the TV broadcast spectrum!

Broadcasters beware!

Unlike the White Spaces Coalition, the mobile operators are political experts. They are part of a 100+ year telecom lobbying heritage. The Bell System was lobbying government agencies before the broadcast industry existed. Now Congress is considering spectrum policy. The FCC is considering spectrum policy.

Broadcasters may eventually extort large sums of money out of the public, but over the next decade they will lose more and more of their spectrum. I am no fan of the broadcast industry. Even after converting to more modern "digital" broadcasting, they are sitting on spectrum they don't need in order to deliver a limited number of channels of broadcast TV to the 14% of households who don't subscribe to cable. I'm one of those 14% and I don't even watch TV, so I have no interest in broadcasters' survival. But I can't help noticing there is one thing broadcasters could do that would block mobile operators from taking over broadcast spectrum.

White spaces can save broadcasters' spectrum rights

If license exempt white space devices are commercially successful, it will become increasingly difficult and then politically impossible for Congress or the FCC to recapture TV spectrum for exclusive use by the mobile industry. If Wi-Fi, WiMAX and other consumer devices appear using TV frequencies, it will become harder and harder to displace these consumer uses and recapture the exclusive use the mobile industry requires.

So, if the broadcast industry really wants to hold onto their current spectrum rights, they should get as many non-interfering "secondary users" into their band as possible. Otherwise, they will eventually lose their primary rights to the quest for more mobile broadband.

Written by Brough Turner, Founder & CTO at Ashtonbrooke; Chief Strategy Officer at Dialogic

But these cracks are going to continue and will eventually lead to similar structural changes in the mobile industry to the ones we are currently experiencing in the fixed market.

While AT&T banned the Google phone from offering VoIP services over the network, this triggered the FCC to act, and the outcome will most likely be that mobile carriers in the USA will not be able to stop VoIP usage over their networks. This will very seriously undermine the lucrative voice call business models of the mobile operators and will eventually force them to open up their networks. This, in turn, will then completely transform the mobile market with an explosion in IP-based services.

But as the current networks would not be able to cope with such increased traffic we will have to wait till 2012-2015, until 4G services such as LTE can deliver a fully IP-based infrastructure that will allow for mass use of these applications over the network. By that time most of the mobile backbone networks will be linked to fibre optics as well and we could see the final arrival of the long promised fixed-mobile convergence.

Of course most mobile operators are in denial over these changes, as the fixed operators have been for a long time. However it will be interesting to see if the mobile operators are able to stall progress for as long as the fixed networks have been able to do so.

The question is also whether this ongoing stalling of these innovations will work in favour of the operators. While it will certainly provide them with a short-term advantage, change is inevitable in the longer term.

While mobile virtual network operators (MVNOs) are slowly becoming slightly more relaxed most of them are still using simple resale models with very low margins, which prevent any serious growth for these operators.

Written by Paul Budde, Managing Director of Paul Budde Communication