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Wireless Broadband vs Fixed Broadband - The Story Continues

CircleID - Fri, 2014-08-22 19:30

This never-ending story is used by opportunistic telcos and their lobbyists to confuse the issue in order to gain regulatory or political advantage.

The debate is now raging again in the USA. In an attempt to talk down their monopolistic position in the market the three telcos — and this time in particular, Comcast — are claiming that real competition does in fact exist in the American broadband market, citing competition from the mobile 4G LTE services as an example.

There is certainly no doubt that people have embraced mobile broadband and this had led to a change in customer behaviour in relation to their use of telecoms services. It is safe to say that to a great extent voice has moved to mobile networks and that people are also using their mobile for short clips of entertainment, such as YouTube, Facebook and music, and in general brief bursts of internet-based video browsing and video messaging.

The reality, however, is that in developed economies, where both levels of infrastructure are available, there are very few people that depend solely on the mobile networks for their internet connections — in general less than 10% to 15% of the population, and these are typically not heavy mobile broadband users, to the contrary.

The argument from the incumbents is wrong. The level of competition between the two is in general of a limited nature, simply because it would cost too much for people to use full video services over their mobile networks.

Things could be different if unlimited bandwidth capacity were made available over these mobile networks, but the history of mobile networks tells us that this is most unlikely. Furthermore, the laws of physics and the limitations in relation to spectrum use make it almost impossible to ramp up mobile networks in such a way that they would be able to compete in a commercially viable way with the broadband access capacity that is available over fixed networks. Where both levels of infrastructure are available it is unlikely that either of these services would seriously try to compete with the other. They will both concentrate on the unique markets they service, accepting that there is overlap for certain services, where there will be some competition.

Somebody using, let's say, a couple of full length video movies over their mobile network would quickly run into hundreds of dollars of extra cost; and as a consequence very few people would do this. Depending on the various mobile broadband packages that are around, using video over mobile could be 20-50 times more expensive than using it over fixed broadband networks.

So, taking all these factors into account, fixed and wireless service complement each other, rather than competing with each other. As mentioned, in some areas they overlap but in most situations they are complementary.

In the past we have used another analogy — that of transport. You can walk, cycle, drive a car, take a bus, train or ferry, or you can fly; and you could argue that all of these transport services compete with each other. But the reality is that we intuitively know which service we will use at a particular time for a particular trip and in such a context there is no real competition between these various modes of transport, which we consider as being complimentary to each other.

The same applies to telecoms, and the fact that most people have both a fixed broadband connection and a mobile phone is a clear indication that people know how and when they will use these services.

So to claim that wireless and fixed compete with each other is untrue and too simplistic. It is clear that incumbent carriers simply use that argument to confuse the market, and to influence their governments and regulators to let them reap monopolistic rents from their services. In reality there is little or no competition in the USA in the fixed broadband market and mobile services are no excuse to warrant that situation to continue.

The fact that this issue arises over and over again is a clear indication that the incumbents and their political lobbyist are very successful in their campaign to create confusion.

We saw this argument used in Australia also, by those who were opposed to the NBN for political reasons. They argued that investments in the NBN were wasteful, as people would use their smartphones and wouldn't need the fixed network.

In Australia the issue has largely gone away, but sometimes those who want to further their political or regulatory case will revisit the argument; and they always find willing participants in the politicised media, or in the ignorant media, who are happy to peddle their stories.

Written by Paul Budde, Managing Director of Paul Budde Communication

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More under: Access Providers, Broadband, Telecom, Wireless

Categories: External commentary

Prepare for the Worst, But Hope for the Best

CircleID - Fri, 2014-08-22 07:14

A couple of weeks ago, I blogged about the importance of the timeline leading up to the September 2015 deadline for the IANA oversight transition proposal. In that post, I explored the nature of U.S. politics and how it can affect the transition if we, as a community, are not diligent in our efforts to meet that deadline.

Since then, the IANA Stewardship Transition Coordination Group (ICG) has held its first meeting and a conference call, resulting in some new information that necessitates an update to that post.

In doing so, my intent is not to be alarmist, but the facts remain — there is a lot of work to be done, and there is little time to do it in.

When you map the variety of meetings, consultations and work we have to accomplish, it's daunting. While there is no specific timeline for the work of the ICG set yet (as far as I'm aware), at the IETF meeting in Toronto, Alissa Cooper, the acting chair of the ICG, presented her sense of the key milestones for their work. We've borrowed her image and used it as a base for the following graphical representation of the events leading up to September 2015:

The first thing you should notice is that the full proposal from the ICG is due at the end of June 2015, not September. This recognizes the fact that the NTIA needs sufficient time to consult with its stakeholders — government agencies and the like — about the proposal before it is finalized, and this could take several months. The last time the IANA contractor was up for renewal in 2012, the NTIA spent more than a year engaged in a process that resulted in it being re-awarded to ICANN. The other date to notice is December 31, 2014, the date the ICG has identified for community proposals to be submitted.

What does this all mean? Our time is incredibly short to complete this important task and the consequences of not finishing it are making me increasingly concerned. I stand by my assertion that we only get one chance to do this. Fact is I feel a sense of unease whenever I hear ICANN community members saying that if we miss the September 2015 deadline, it's okay, because the IANA contract can be extended.

If you follow U.S. politics, you know how partisan the debate about the IANA transition is. From ill-informed media reports to political grandstanding, there's no shortage of talking heads bemoaning the 'president's decision' to turn the Internet over to bad actors.

The problem is that it may be extended into the term of a U.S. political establishment hostile to the NTIA backing away from its traditional oversight role. By not meeting the deadlines, we risk having to push the internationalization of the IANA functions through during a time when both houses of Congress could be controlled by the Republicans and a Republican president (after the election in 2016).

Are they uninformed and using the issue for their own political gain? Absolutely. Does that mean that we should ignore them? Absolutely not. They have the authority to affect our processes, from legislation that can delay the process to an outright block of the transfer, and they are watching this process very closely. So far, Rep. Shimkus (R-IL) and Rep. Kelly (R-PA) have put forward bills to impede the process of the internationalization of the IANA function. At the U.S. Internet Governance Forum, Greg Walden presented an impassioned defense of the .COM Act in his keynote.

These are some pretty high-ranking Congressmen that wield considerable power — for example, Walden is the chair of the House Subcommittee on Communications and Technology. They also have some well-defined ideas about what the outcome of the oversight transition process should look like.

Given the current rhetoric in Washington, the internationalization of IANA won't stand a chance once Obama become a 'lame duck' president or has vacated the White House. The IANA oversight transition initiative is the result of his office and his staff. It may not be well known outside of North America, but when there is a change of government in the U.S., all senior public servants are replaced. There is an extremely high probability that most, if not all, of the Obama administration's advisors will leave their positions at some point in the next two years. Moreover, this exodus of senior-level bureaucrats usually begins the year before as they seek employment in the private sector. So, there is a strong probability that Larry Strickling — among others — will not be around to shepherd any final IANA transition proposal through the corridors of power in Washington (note that this is a personal observation based on historical precedent. I have no knowledge on Larry's — or anybody else's — plans).

What happens when the inside champions for the internationalization of IANA move on? Who will be left to push the file through?

My fear is this — if we do not meet the September 2015 deadline, we will have failed. The next administration in Washington will have no appetite to try this process again. It may be viewed as a failure of not only the Internet governance community, but of the efficacy of the multi-stakeholder model itself, and that's not something we want to put at risk in light of the increasing threats it faces.

We are all aware that prior to the NTIA's announcement in March there was significant discussion about the extent of the U.S. government's control over the Internet. It's been a key driver of the push toward a multi-lateral model for Internet governance. If Congress denies a proposal to internationalize the IANA functions because of our inability to meet the deadlines, it will make U.S. control over the Internet a demonstrable fact in the eyes of much of the world. We do not need to give the opponents of the multi-stakeholder model more reason to call for multi-lateral control.

Yes, this is speculation, but the potential outcomes are real and could derail our entire process. I think we should heed the words of Benjiman Disraeli who said, "I am prepared for the worst, but hope for the best."

Let's focus our energies on the IANA oversight transition. It is our most pressing issue at this time — we need to put aside the weight of he perceived wrongs of the past and move forward in trust as a true multi-stakeholder community.

Written by Byron Holland, President and CEO of CIRA

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More under: ICANN, Internet Governance, Policy & Regulation

Categories: External commentary
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