May 2015

Telecommunications Companies Seek FCC Stay Of Title II

In a joint petition, USTelecom, CTIA, AT&T, the Wireless Internet Service Providers Association and CenturyLink have asked the Federal Communications Commission to stay its Feb. 26 order classifying Internet access as a Title II common carrier service. They have all challenged the new open Internet order in court as well. In their motion, they point out that the FCC was sharply divided. But that still leaves a majority backing the decision, and an FCC stay is highly unlikely. The rules go into effect mid-June unless they are stayed by the FCC or the US Court of Appeals for the DC Circuit, which is hearing the appeals of the decision. "Petitioners request that the Commission immediately stay the Order insofar as it subjects broadband Internet access service and the interconnection of Internet Protocol ('IP') networks to Title II, including the broad, but amorphous, 'Internet conduct standard' that allows the Commission to adjudicate whether new and innovative services and offerings may proceed," they said.

Obama’s Social Media Hits and Misses

Nate Lubin, the White House’s social media guru, is stepping down. He’s left quite a legacy. President Barack Obama has used social media to connect with voters in the United States as well as people around the world more actively than any other President. The main reason for this is that other commander-in-chief’s haven’t had the online tools that Lubin, a 28-year old who started as a campaign volunteer in New Hampshire in 2008 and joined White House staff in 2013, has at his disposal. But that shouldn’t dismiss the effectiveness of some of the campaigns Lubin oversaw on behalf of the President, many of which rolled out some of President Obama’s more ambitious initiatives. To mark Lubin’s departure, we’ve gathered what we consider a few highlights, as well as some misses, of President Obama’s social media messaging:

  • Lowlight: “Things Everybody Does But Doesn’t Talk About, Featuring President Obama,” on Buzzfeed. The video was an effort by the president to get people to visit http://www.healthcare.gov. It comes across as a bit labored and not all that funny. But credit to Buzzfeed: they got President Obama to use a selfie stick.
  • Highlight: The White House’s #FreeCommunityCollege campaign. The president posted a video on the White House Facebook page ahead of this year’s State of the Union address hyping the President’s plan to offer two free years of community college. By social media standards, it was a raging success: more than 8 million people have watched it.ident Obama’s social media messaging:

Do You Really Own Your Smartphone?

In July, the US Copyright Office will decide whether tractor-maker John Deere’s claim that its customers don’t really own the tractors they’ve paid for is a valid one. Consumers don’t hold the copyright on the software that runs on John Deere tractors, therefore the company claims that its customers aren’t allowed to modify or repair their equipment in some cases. This conflict of ownership and copyright has been around as long as digital technology, and as software becomes woven into more and more products, the issue will only create more conflicts. That’s why Rep Zoe Lofgren (D-CA) has been struggling to change that law for the past 17 years.

Rep Lofgren submitted the Unlocking Technology Act of 2015 to committee in March -- the newest iteration of her ownership crusade. And if it’s made into law, tractor owners would be allowed to modify the equipment they’ve paid for and otherwise treat their software-enabled property as they would any other object they own. The Digital Millennium Copyright Act of 1998 (DMCA) was originally instated to protect copyright holders from having their intellectual property illegally distributed, but Rep Lofgren said the law hasn’t kept up with the times. Software will eventually infiltrate everything; even today, software is finding its way into everything from mopeds to toasters. But the DMCA doesn’t just make it illegal to distribute copyrighted works, it also makes it illegal to bypass the copy protection. Rep Lofgren’s bill would change that. The US Copyright Office’s decision in July will provide at least a single precedent for future decisions at the intersection of copyright and ownership. But until then, farmers -- and everyone else -- must wait.

Verizon and Cogent settle differences, agree to boost Internet quality

Verizon and Cogent announced an interconnection agreement that should improve Internet quality for Verizon's FiOS and DSL customers. The good news may be thanks partly to the Federal Communications Commission decision to reclassify broadband providers as common carriers, because Cogent could have complained to the FCC if the deal wasn't signed. Cogent, a transit provider that distributes traffic on behalf of businesses that deliver services over the Internet, has fought bitterly with Internet providers such as Verizon over whether it should have to pay for connections to their networks.

Cogent has maintained that the peering agreements should remain "settlement-free," without money changing hands, and says it won't have to pay Verizon under the new agreement. The fights reached a fever pitch when Cogent was distributing traffic from Netflix, which accounts for about a third of North American Internet traffic during peak usage hours. Netflix agreed to pay Verizon for direct connections to its network in 2014, relieving much of the stress on the Cogent-Verizon connections. But according to Cogent founder and CEO Dave Schaeffer, the Cogent/Verizon links are still "massively oversubscribed," causing performance problems when Verizon customers access the websites of Cogent customers. Cogent had threatened to file complaints to the FCC, as allowed by the commission's Open Internet Order. But that won't be necessary, at least in the case of Verizon, because of the agreement.

Verizon Rural Call Completion Hotline Launched in FCC Compliance Plan

Rural telecommunications companies that have problems with calls not going through to their customers from Verizon customers now have a hot line to call at Verizon. In addition, Verizon plans to award $30,000 to $50,000 for an academic study on methods to determine and resolve rural call completion problems in real time. Both initiatives were discussed at a rural call completion workshop that Verizon conducted in April. The hotline, academic study, and workshop all were conditions of a rural call completion compliance plan that Verizon reached with the Federal Communications Commission, which in January said the company failed to investigate evidence of low call answer rates to 26 different rural areas. The settlement included $2 million in fines and $3 million for the compliance plan. Rural carriers have complained for years about calls not going through to their customers. As participants explained in Verizon’s workshop, this sometimes occurs because one of multiple carriers handling the call wants to avoid paying per-minute access charges to the terminating carrier. Those charges are higher in rural areas to help cover the higher costs of delivering service in those areas.

Broadband is like a river (but not the way you think)

[Commentary] In his 2014 book, "The Accidental Superpower", Peter Zeihan traces the origins of America’s economic prosperity to its abundance of rivers. The US has more miles of navigable waterways, which provide a uniquely efficient and inexpensive means for transporting goods across a continent, than the rest of the world put together. According to Zeihan, this difference was a critical factor in the country’s emergence as the world’s leading superpower. And because rivers do not require large-scale efforts to build and operate, they favor decentralized development, which has encouraged local entrepreneurs, who represent a distinctive aspect of the US economy. The US is also blessed with many natural harbors that are another major contributor to a country’s economic success.

In recent years, it has been technology -- and especially information and communications technology (ICT) -- that has provided the critical infrastructure that has promoted economic growth in the US and globally. It turns out that the economic impact of ICT has been based not only on its technical characteristics, but also on the way that it has been developed and deployed. Although we remain the pre-eminent source of tech innovation, new technologies get diffused around the world almost overnight. If we are going to keep our economy strong in a highly competitive world, if we are going to keep the Internet-powered engine of innovation running at full speed, we need policies that will promote permission-less innovation, continued investment in expanding and upgrading our digital infrastructure and policies that encourage companies to use it creatively.

[Richard Adler is a distinguished fellow at the Institute for the Future in Palo Alto (CA)]

AT&T extends 1-Gig business fiber services to 180 US cities

AT&T has been enriching its business services offering with a new fiber footprint that can now deliver 1 Gbps services to multi-tenant office buildings in more than 180 cities in the United States. Initially each of the buildings that have been connected to the fiber network will support symmetrical 300 Mbps with the ability to scale to 1 Gbps. These connections have been made possible thanks to the fiber-to-the-building (FTTB) portion of AT&T's Project VIP program. And with Ethernet, VPN and cloud growing 14.8 percent year-over-year in the first quarter to $2.6 billion in its business services segment, it's not surprising to see AT&T aggressively building out its fiber network into more buildings in its 22-state territory.

Crown Castle to acquire Quanta Fiber for $1 Billion

Crown Castle is acquiring Quanta Fiber (called Sunesys), a subsidiary of Quanta Services, for about $1 billion in cash, a deal that will immediately bolster the wireless tower company's dark fiber capabilities for small cell backhaul services. A big element of this deal for Crown Castle is the fiber footprint to serve small cell backhaul deployments being carried out by major wireless operators in a number of key cities in the United States. By gaining access to Sunesys' dark fiber capabilities, Crown Castle will be able to address Verizon Wireless' desire to have these solutions for its macro cell and small cell deployments.

While other large operators have yet to join them, Verizon Wireless has been mandating that its backhaul partners deliver a dark fiber backhaul solution. Ben Moreland, CEO and president of Crown Castle, said that by acquiring Sunesys, the company will have fiber assets that could potentially serve more than 3,500 small cell opportunities. Sunesys currently owns or has rights to nearly 10,000 miles of fiber in major metro markets across the United States, including Los Angeles, Philadelphia, Chicago, Atlanta, Silicon Valley and northern New Jersey. About 60 percent of Sunesys' fiber miles are located in the top 10 basic trading areas.

Sprint makes Wi-Fi the 'fourth layer' of its network with new Boingo deal, small cell push and Wi-Fi router

Sprint CTO Stephen Bye wrote that the carrier views Wi-Fi as "a complementary fourth layer of our network (the first three layers being our 1.9 GHz, 2.5 GHz, and 800 MHz spectrum bands). By enabling customers to move more smoothly between trusted Wi-Fi and cellular, our customers will have a better mobile experience in more locations, all while lowering their cost of data usage." Sprint offers Wi-Fi calling on the newest iPhones and most of its Android smartphones. Sprint now has more than 25 smartphone models and more than 15 million customers with the ability to use Wi-Fi calling. However, currently Sprint's Wi-Fi-to-cellular handoff is not smooth and if a customer initiates a call in a Wi-Fi coverage area and then leaves Wi-Fi coverage the call will likely drop.

Sprint also launched Wi-Fi Connect, a consumer Wi-Fi router that prioritizes Sprint specific Wi-Fi Calling over all other Wi-Fi traffic and includes "smart connect" technology that dynamically manages 2.4 GHz and 5 GHz Wi-Fi bands for optimal Wi-Fi data performance. For customers who need additional in-home coverage, the device is free of charge if they have broadband Internet access and Sprint's Wi-Fi Calling capability on their phone. Interestingly, Sprint is also launching outdoor small cells with Wi-Fi to enhance coverage and capacity. "The current product we are working with for outdoor street level coverage includes Wi-Fi and should be commercially deployed in the near future," Bye wrote. Sprint's Wi-Fi push comes as the carrier is reportedly planning to announce a new network upgrade effort.

Verizon-ESPN dispute may pave way for a la carte pay-TV programming

[Commentary] There's a reason ESPN sicced its lawyers on Verizon, shattering any pretense of being part of a big, happy pay-TV family. Verizon's new Custom TV bundles of channels -- which break off ESPN and other sports channels into a separate package -- could signal the end of a business model that cable networks love and consumers detest. The stakes couldn't be higher. If Disney-owned ESPN prevails in court, it will ensure that the expensive sports channel will continue to be forced on subscribers who don't want it. ESPN accounts for an estimated $7 of monthly bills, more than any other channel that isn't purchased separately. If Verizon wins, it will open the door for other pay-TV companies to break up conventional programming bundles and give consumers more freedom to choose channels.

"This is a potentially watershed event," said Rich Greenfield, a media analyst with BTIG in New York. No one disputes that the pay-TV industry is undergoing radical change. Like publishing, music and other businesses in the throes of digital disruption, pay-TV companies are struggling to protect Niagara-like revenue streams as consumers demand more choice and value. Cutting the pay-TV cord was once only for the technologically savvy. Now, devices such as Roku and Apple TV have democratized streaming video. That has sparked an explosion in quality programming from subscription services including Netflix, Hulu, HBO Now and Sling TV. So Verizon's move toward smaller, cheaper, more competitive bundles makes perfect sense -- which is why it's so threatening to ESPN. Cable networks have long enjoyed guaranteed customers -- and revenue -- through contracts with pay-TV providers. In the future, they may have to peddle their wares directly to viewers, which is a lot harder. It's no surprise, then, that ESPN is fighting to protect the status quo.