Net Policy News

Possible Chancellor acts as if Ericsson and Infineon don’t exist

“Norbert Röttgen, CDU politician with aspirations for the party chairmanship and the chancellorship,” writes Achim Sawall says, “European companies were not allowed to roll out 5G in China … Beijing would never even think of opening its 5G network to foreign providers.”

China Mobile and China Telecom/Unicom are Ericsson’s largest customers for 5G, I believe. Sawall adds, “The Europeans received over 40 percent of the core network orders from China Mobile.” This is widely reported and the German language press called Sawall on his error. 

He refuses to admit his mistake, like a Washington politician. (All parties.) It’s highly likely that “confirmation bias” makes it impossible for him to see facts in front of his face.

Around a decade ago, China allocated 10% of its telecom market to each of Alcatel, Ericsson, and Nokia, Alcatel CTO Marcus Weldon mentioned at the Brooklyn 5G conference. The Nokia purchase of Alcatel had been announced. Marcus said he wasn’t sure whether Alcatel’s share of the Chinese market would be added to Nokia’s. 

The Chinese allocated nearly a third of their market to European companies under threat of a ban on Huawei. China and Europe came to an agreement on industrial policy.

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I was a member of this group, which was led by exceptionally able and gracious engineers. There is an enormous amount of misinformation from people who haven’t read the primary documents. This isn’t about Chinese control, and I expect CNET and FT will soon correct the errors in their articles. It’s about telcos wanting control, to guarantee low latency/QoS and charge more. See the list below.

Putting it in the middle of the US China war will alienate those needed to prevent it being approved, especially the Europeans.  

I think New-IP was a mistake. I was actually on the ITU Focus Group 2030 where it was presented. Among those who approved the final document were

Mehmet Toy, Verizon
Alexey Borodin, Rostelecom
Yuan Zhang, China Telecom
Yutaka Miyake, KDDI Research (Japan’s #2)
Dong-Hi Sim, SK Telecom (Korea’s #1)
Sundeep Bhandari, NPL​

Actually, nearly all the large telcos, including Deutsche Telecom, Vodafone, and British Telecom, support this kind of control. (Deterministic Networking, also called Non-IP at ETSI, the European Standards group.)

Here’s the key document.  I will have more later. Meanwhile, email [email protected] for details.

David McCabe in the NY Times reported a 67-page official Google filing claiming

it does not control enough of the industry … 
It has not built its system to give its own services an advantage …
They denied that the company’s software gave it an inappropriate advantage… 

Until Google presented these facts, investors (and just about everyone else) assumed that in fact Google did have strong market power. It was fined almost US$2 billion by the EU and the US Justice Department is likely to file an antitrust suit shortly, So are the state Attorney-Generals and possibly the UK.

The $1.067 trillion dollar market cap represented a 32:1 price to earnings ratio. As investors discovered they were mistaken about Google market power, the stock fell over $200 billion, although the P/E ratio remained above the 22:1 average of the Dow. 

(The stock price effect here is pure satire. Everyone knows Google lawyers were doing what American lawyers usually do, make claims on behalf of the client that are not true. Jennie laughed out loud when I told here what Google claimed.)

The remarkable rise of Reliance Jio, to 383 million 4G users in four years, has brought India to the #2 position in the world Internet. Bharti has 143 million broadband subs and Vodaphone 118 million. (Trai data).Some people still have two sims but that’s become less important as caps are more generous and other charges approaching unlimited.

The U.S. population is 329 million. Western Europe is 222 million.  All Europe, minus Russia is under 600 million. India’s Internet growth is slowing but still substantial.  It will be several years before India, like China, has more Internet users than the U.S.

One consequence is that Internet institutions, like ICANN and 3GPP, are not appropriate to lead if they remain dominated by the U.S. and Europe. Some are uncomfortable with the UN/ITU, but unless existing institutions change, what other choice do we have?

The Internet is for everyone, no matter their place of birth or skin color.   

Sorry, Paul McAleese, Shaw’s cable network doesn’t match the capabilities of the Bell or Telus fibre to the home. That you offer a gigabit download to 99% of your customers is a great advance, worth trumpeting. It’s especially welcome where the telco hasn’t upgraded to fibre. But coaxial cable is not fibre; calling it fibre+ is simply false advertising.

Shaw’s upstream is “up to 25 Mbps.” Where Telus has fiber to the home, the upstream can go up to 940 Mbps. Neither company releases actual speeds, but I can tell by the network design what customers can expect. Shaw customers will get 20 Mbps upstream at least 90% of the time. Telus fibre customers will get 400 Mbps upstream at least 90% of the time. (Almost all networks are shared, but a decently designed network rarely see serious degradation. All the Canadian networks are well-designed.)

Telus took Shaw to court on the misleading claim. In the U.S., advertisers are allowed some “puffery,” so I don’t know what the court will decide. Shaw is defending vigorously, mostly by confusing the issue with irrelevant technical datapoints. It would have been smarter to concede the semantics and point to the facts of upgraded cable – including that it’s available in many locations where the telcos don’t offer fibre.

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I’m sure Vint Cerf – and the vast majority of Internet architects – remain certain that TCP/IP with minor improvements is the right way forward. But the European and Chinese telcos, backed by their suppliers, want a replacement called “New IP Networking.” ETSI, the very powerful European standards group, calls it “non-IP.:They claim, as you can read below, “A fundamental change is needed.” Deutsche Telecom and suppliers are key proponents.  

Update July 20: 

Current status of deterministic networking:

• IETF RFC moving forward with support from Cisco, Ericsson, and Huawei
• ETSI Special committee formed to move Non-IP forward
• ITU Focus Group 2030 included it in final architecture, likely to be rubber stamped by Study Group 5. US may make noise that will lead to same result with slightly toned down wording.
• Internet Society Opinion piece but no active engagement visible

Highly likely result, unless something dramatic is done: will replace TCP-IP over 5-15 years in favor of telco system. End update

Since the 1980’s the telcos in the U.S. have been fighting to control the Internet, a war described as Bellheads vs Netheads. (Ask Vint Cerf or Dave Farber about this or “protocol wars.”) The telcos are back big time, with proposals called “Deterministic Networking” (IETF, Ericsson, Cisco) New IP (ITU, China,) and Non-IP (ETSI, Deutsche Telekom, France Telecom.)

Telcos have an enormous advantage because they control the physical network. They are businesses dedicated to making money; of course they would like to erect a “tollbooth on the Internet.” The problem they face is that Internet connectivity is very cheap to deliver. The local and long-distance phone networks were enormously profitable. 

The telcos continue to be among the most profitable companies on Earth. Verizon’s net income has averaged over US$20 billion the last three years. But they are not providing investors the promised increased profits.

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