Uncategorized – Net Policy News

“If Net Neutrality Is Repealed, the Internet Will Die!” Factcheck.

Highly unlikely Net Neutrality is important and I’ve supported the idea since 1999. But I do not believe, “It will end the Internet as we know it,” attributed to FCC Commissioner Michael Copps. No one is likely to show you The Washington Post when you ask for the NY Times. AT&T’s DirecTV Now will not appeared when you thought you were going to Netflix. Ending Net Neutrality will raise costs for those sending video, disproportionately more for smaller companies and start-ups. Google YouTube & Facebook have enough clout to get a much lower rate. Much or most of the extra cost will be passed on to consumers. Most of the telcos’ extra earnings will not go to better networks. CEOs and CFOs across the world have said most would go to shareholders.

“If Net Neutrality Is Repealed, the Internet Will Die!” has been said many of my most progressive friends. They are almost certainly wrong. It would be bad business, bad politics, and unlikely engineering. Most issues will arise where large volumes of video are sent. Web surfing and most of Facebook use much less bandwidth and would be much harder to throttle.

Shelly Palmer printed the quote, but then went on to refute it.

Factcheck T-Mobile/Sprint

Some facts and researched opinions. I’ve tried to be neutral but I have a pro-consumer bias. I’ve editorialized strongly against the deal.

Below: On the effects of 4-3; On whether 5G will come faster; “Combining is the only way they can fight back against the two industry leaders;” On whether Sprint could survive without the merger; On whether Sprint could survive without the merger; On whether the T-Mobile 5G is a “seismic shift;” 5G is not 5G: Much will not be the truly high speeds of millimeter wave; Is even the real 5G, millimeter wave, revolutionary?; “5G offers more reliability than 4G or LTE”; Is 5g required for autonomous cars?’ Is 5G needed for telemedicine or IoT?

On the effects of 4-3 Tmo says prices will come down because of the deal. The best research is from Pal Zarandy at Rewheel, who just did a major study. He found prices were 40%-50% higher in Germany and Austria (4-3) than six others, including France. Gigabyte price development in 4 to 3 consolidated versus 4-MNO European markets – September 2013 to March 2018. Because France has so dramatically cut prices, my figure would be lower, “10%-20%, sometimes more.” Canada & France went from 3 to 4 with large price drops, which are now happening in Italy. Dubious. Wireless prices will go down because the cost per bit is decreasing rapidly. They will probably be higher than without the deal.

DC Beltway blindness

CTIA Scott Bergmann

the U.S. is in a global race to build the next generation of networks, 5G.Being first with the next generation of wireless is essential to maintaining our lead in the broader wireless ecosystem. And 5G leadership will help keep the next generation of developers—whether for apps, operating systems, augmented and virtual reality, or artificial intelligence—focused on the U.S. accelerating 5G deployment timelines will add billions to the U.S. economy.This reform builds on the FCC’s earlier bipartisan efforts to modernize historic preservation policies and its current efforts to ensure that America is 5G ready. The FCC has already recognized that small cells have little or no impact on environmentally sensitive or historic sites.

If the agency follows through, America’s economy and consumers will win—and the U.S. will be well positioned to win the race to 5G.

The wireless industry is ready to invest $275 billion to deploy 5G, according to Accenture. 5G will create 3 million new jobs nationwide and generate $500 billion for America’s economy.

Steve Crocker Exiting ICANN Chair

Term limited. Steve writes,

We have term limits for directors, no more than three consecutive three year terms. I have reached my limit and am leaving the Board. The Board’s chair is chosen each year by the Board. The formal election of the next chair takes place at the end of the Annual General Meeting in Abu Dhabi.

He has been active literally since the beginning of the Internet. He was part of the UCLA team, led by Len Kleinrock, that connected the first Internet node, back in DARPA days. Wired has a great interview about the early days, including how Steve developed the RFC system. There’s also an oral history of the early days Steve did back in 1991.

Americans Avri Doria and Sarah Deutsch have been nominated and will likely join the ICANN Board at the October Abu Dhabi meeting,

Again & Again: India Shuts Down the Internet

Shutdowns are India’s standard operating procedure against dissent and disorder. The authorities shut down Internet and most phone service to over 20M people for several days. They believed shutting communications would prevent the demonstrations from spreading after Baba Gurmeet Ram Rahim Singh was arrested and convicted of rape. Over 30 people died and hundreds were injured in the unrest. Effective action was called for but that doesn’t mean shutting communications was appropriate. Even more troubling to those of us who believe in free expression, India has shut down the Internet in Darjeeling for almost three months to hinder the campaign for Gorkhaland independence.

Singh was the leader of a sect with a very strong following among the poor. Between the charges in 2002 and the arrest in 2017, he was massively courted by Indian politicians of several parties. The newspapers believe the evidence of rape was strong, but obviously this is more than a simple criminal case.

The Internet makes it easier to organize anything, from responses to natural disasters to parades after football victories. There’s no evidence the shutdowns reduced the violence in this case or several other temporary shutdowns around violent events. The authorities obviously think so; I’m dubious, but also have no evidence.

Microsoft Stops the World in 2014: Claims No Improvements in Broadband in 30 Months

Microsoft President Brad Smith was wrong claiming “Today 23.4 million Americans in rural areas still lack broadband internet access.” The figures are from 2014. Since then probably half or more have been reached by AT&T or Verizon LTE. Each report 98% LTE coverage, with T-Mobile close. LTE speeds are higher than the proposed White Space radios.

He also was almost certainly wrong claiming White Spaces would be, “Over 50 percent cheaper than the cost of current fixed wireless technology like 4G.” By almost any appropriate comparison, WS would be more expensive and slower than LTE. The Microsoft/BCG figure assumes that AT&T, Sprint, T-Mobile, and Verizon would not be part of an LTE rural plan. All four have massive amounts ofcompletely unused rural spectrum as well as existing facilities that would bring down the cost. (AT&T has 60 MHz of spectrum unused nationwide, enough to more than duplicate the entire Verizon network.)

M/BCG instead assumes LTE would come from a new company New entrants might have high costs for spectrum and would need to be much more heavily subsidized than existing carriers.

Their estimate for the cost of the LTE cell is based on a tower cell site sized for 300-1,000. They compare that with a WS radio sized for a few dozen at most. An LTE cell of similar size and capacity would be cheaper than the likely WS radios rather than many times more expensive. LTE gear is produced in billion quantities, a thousand times more than even an optimistic WS plan. This almost certainly will keep LTE gear less expensive.

6 Phone Calls Can Predict US Investment Without B________

Millions of dollars are being spent to persuade Ajit Pai FCC decisions on pole attachments, broadband paperwork, local regulations, neutrality and backhaul prices will “incent investments and more broadband deployment. I’ve listened to CTO’s, CFO’s and CEO’s explaining investment strategy for nearly two decades. I’m convinced none of his policy proposals will have significant impact on actual investment or deployment. Pai can determine whether I’m right by making six phone calls and asking one question on each. Just call the CEOs or CFOs of AT&T, Charter, Comcast, Sprint, T-Mobile, & Verizon. They control 90% of mobile and 65% of landlines.

Ask them, “If I make these changes, how much will you increase your capital spending and rural deployment?” Verizon made a point of telling Wall Street that despite the 5G build, they wouldn’t increase capex in the coming years. Charter/Time Warner has said they will cut and I believe AT&T similar. Sprint has said they will not come close to their fiscal 2016 capex. Most of the remaining companies – Century, Frontier, Altice – are financially weaker and even less likely to invest.

Capital spending is mostly driven by technology change, competition, market demand, underlying financial problems, and equipment cost.

FCC Plan May Reduce 4G Deployment (Not Satire)

With subsidies in sight, telcos reduce investment. There’s no firm data, but the net result of the $7B broadband stimulus may have been fewer unserved homes connected. Since 2009, carrier investment in broadband in rural areas has gone down drastically. Ajit Pai is moving forcefully on his plan to promote rural broadband, for which I applaud him.

Takeaway: Pai wants to spend $billions to bring broadband to the unserved. Under current plans, most of the money is likely to go where telcos would build without a subsidy, buy obsolete technology, or give the telcos two or three times what the job should cost. Any spending on wireless except where towers or backhaul is unavailable should be assumed wasteful until proven otherwise. Realistic costs need to be developed and subsidies allocated on that basis.

Pai is putting $4.5B on the table this week to bring 4G wireless to those they project won’t be served without it. I believe Pai is honorable but is being misled by staffers and lobbyists. He proudly signed his name to a statement below that the $200M he approved for New York State would go to “the deployment of broadband infrastructure to unserved areas of rural New York.” (Emphasis added.) Most of that money will not go to unserved areas.

Stupid DC Tricks

Reporters wearing sleeveless dress or open toed shoes are forbidden in the House Speaker’s Lobby, per Paul Ryan

No one needs broadband, AT&T VP Tim McKone told Congressmen objecting to AT&T’s arbitration clause. It effectively limits lawsuits when AT&T lies to and cheats customers. He claims no one is forced to buy from AT&T and hence be stuck with an almost worthless arbitration system. True, no one is “forced” unless they want a decent Internet connection. Randall also has made clear that AT&T deliberately misleads customers. “Don’t look at the price we advertise,” he warned Wall Street years ago. “It’s misleading. Look instead at our ARPU.” More

Will “Free” Offer From Sprint Kill T-Mobile Merger?

Sprint and T-Mobile should be laughed at if they claim their merger won’t hurt competition. Craig Moffett is on target. The almost free offer “is an almost perfect affirmation that the current industry structure is serving customers very well indeed? Sprint and T-Mobile have been test-running a narrative along the lines of ‘if you think it’s competitive now, imagine what we could do if we merged.’ Well, it’s hard to imagine that regulators will be tempted to imagine anything much better than giving away service for free (imagine!).”

The Sprint move is actually sensible because they have far more capacity most places than they can sell. They have ~60 MHz of spectrum unused in most of the U.S., enough to more than duplicate Verizon’s network. They are going to Gig LTE in 2017, a doubling or tripling of capacity, and look to be the first to massive MIMO in the U.S., which is raising capacity 3X to 10X in Asia.

15 Republicans Call for Lower Prices, Gov to waste money *LOL)

(LOL articles are satire, perhaps mixed with some truth.) The headline is SENATORS URGING PRESIDENT TRUMP TO EXPAND BROADBAND ACCESS. They claim a jumpstart in growth and jobs. They insist on affordability. All are great ideas but almost none of the money will have that effect. Very little of the $7B Broadband Stimulus actually expanded access; most of it was waste and telco giveaways. This will be the same. Honest economists know the economic impact of rural broadband is somewhere between modest and too small to measure. Most of the signers will continue to do close to nothing for affordability..

The headline should have been 48 Senators urge Trump to give away money to telcos. They urge, “President Trump to include broadband in any infrastructure initiative.” This will provide, “economic opportunities that will jumpstart growth in jobs and wages.” They demand, “Connections [that] are fast, reliable, and affordable.”

Truth

Ralph de la Vega of AT&T and the Price of Discrimination

Ralph de la Vega, one of the most capable executives in telecom, is retiring as Vice-Chairman of AT&T. He brought the iPhone to America, working closely with Steve Jobs. I first met him in the early years of DSL, when his BellSouth division was far more efficient than any other in the U.S. Gary Becker won a Nobel Prize for developing an economic analysis of the cost of discrimination. Ralph’s career shows how a company benefits by not discriminating.

Nearly sixty years after Ralph came to America as a young boy, you can still hear Cuba in his voice. He worked his way through a college that isn’t famous as a janitor; he probably didn’t have the style to get a job at many companies. Even today, someone like de la Vega from a working class background, with strong ethnicity, and a degree without prestige would rarely get a chance at Google, Facebook, or Apple.

If a company discriminates against some qualified employees, the company is weakened. The U.S. telcos have accepted that since the 1950’s. They’ve been more open than most American companies.

Thailand, Indonesia, & ASEAN soon at 60% smartphones

113M 3G/4G phones sold in 2016. The ten South East Asian countries have a population of 625 million, nearly twice as many as the United States. By some measures, they will soon have more Internet users than the U.S. Indonesia, the Philipines, Thailand, Malaysia, and Singapore have more SIM subscription than they have people. Mobile is exploding in Myanmar, which will soon join that group.

There are probably only 350-400M mobile subscribers; dual SIM phones and other factors explain the discrepancy. Digitimes’s 60% smartphone estimate is for the end of this year, up from 46% in 2015.

Korea’s ?~$3/month border charge on Youtube, Netflix, etc.

80% to telcos, 20% as tax to gov. You virtually can’t get to the 50 million fairly affluent Koreans without going through the network of Korea Telecom (largest in landline,) SK Telecom (largest in wireless,) or LG. Economists call this a “terminating monopoly” and like all monopolies it can be used to extract more from customers.

The government has now proposed to charge what one source estimates as $0.026/gigabyte on the traffic they receive, reviving a “sender pays” system. I can’t find the primary sources, all of which are in Korean. Google translate works well if I could find a webpage or document. Help appreciated. A charge at that level is totally unrelated to costs, being several times higher than content delivery networks charge for a comparable service. Much of the impact will be on foreign companies, and the Korea regulations provide some benefits to local companies. From France and Germany to Korea and China, “tax the Americans” is a very popular cry.

Pai’s first call: Julie Knapp, please don’t go

The quiet man at the FCC engineering office is one of the best. Howard Buskirk says Julie is leaving, a major blow. He survives the politics at the FCC by keeping a low profile, but every engineer who goes through Washington knows him well. He can go one on one with top CTOs or Professors and earn their respect. He’s one of the few in the industry with a broad enough knowledge to look years ahead.

Will universal service funding be obsolete in a few years because of the low latency LEO satellites? Is 5G millimeter wave going to be a competition killer? Was wireless ready to displace DSL and cable, as some people told the broadband plan? Ask Julie and you get a well-informed answer, including an “I don’t know if he doesn’t.”

At the FCC, on important decisions, The Eight Floor – the Commissioners – are said to ignore everyone else, especially the technical staff. Every other regulator I know – France, England, China – make sure at least one of the decision makers has enough of a technical background to point out to the others when the usual influence peddlers are lying. (In D.C., they are almost all lawyers including many former politicians. Many are very good at persuasion. With salaries up to $16M (David Cohen, Comcast,) you get some of the best. Some of them – Tom Tauke, David Young – are skilled enough to make their points without abusing the truth. Most don’t care, as long as they aren’t caught.

There are two open seats, one Democrat and one Republican. (I’ve never talked politics with Julie so I don’t know which he is.) Ajit Pai would be proving he deserves the job if he offered one of them to Julie to keep him in the building.

Trump’s FCC, Pai: Bush is back

The new men and the issues they should face. I know several. They are smart, dedicated, and believe in what they are doing. They are hardline against regulation and have often supported the telcos against the FCC. It’s likely Trump era policies will echo Bush II. Bush’s first FCC Chairman, Mike Powell, was close to Eisenach’s PFF. I hope they focus on government waste, such as the $100 scandal at RUS that’s been covered up or how much of USF/CAF is pure giveaway. (about half, based on what the telco CEOs are telling Wall Street.)

Ajit Pai looks to take over the FCC. He has a brilliant legal mind but needs a deeper knowledge of the facts on the ground and technology. (If I wasn’t on deadline, I’d find and include half a dozen examples. See Neutrality and investment below.)

He has a plan to extend broadband that needs to be informed by how much has been wasted in government programs to do so. He’s very well informed about the D.C. discussion, but needs to know more to recognize lobbyist lies.