Recently in spectrum Category

There are a bunch of debates raging over the telecommunications infrastructure. 

Congress has looked at Open Access bills for cellular networks. By this we mean that a consumer can use any available handset or device on any cell network. This is kind of the Carterphone concept for cellular.

The 700 MHz auction had open access provisions built right in, so VZW's 4G/LTE network will need to incorporate Open Access.

Spectrum is a finite resource. TV, radio, public safety and the cell companies all share access to various licensed spectrums. Other companies, like oil companies to communicate with rigs and ships, have purchased spectrum licenses. There is also the unlicensed bands like 900 MHz, 2.4 GHz, and 3650 MHz that are shared by any and all. We are seeing in the 2.4 GHz band that too much usage causes crowding and in some cases makes the spectrum useless. (Your little blue Linksys wireless AP's use 2.4 GHz, as does quite a few cordless phones and other consumer products). As more and more products and consumers go cordless and wireless, this resource will be used up. It must be allocated better. 

(An aside: Open Access has one advantage: less handsets in the landfill.)

Net Neutrality is based on network management. Both cable and DSL have bottleneck issues in your community. To manage those issues, the service provider uses tools, hardware and software, to prioritize traffic. This same set of tools can be used to degrade Vonage while prioritizing the ISP's VoIP service offering. These same tools can be used for DPI (deep packet inspection) to read every unencrypted packet that passes through the box. This same tool can be used to police the network (or Internet) of child porn, illegal downloads, and the like. Do we really want that kind of Big Brother action? 

At the heart of the NN debate is the fact that a few ISP's have degraded VoIP packets and legitimate P2P (peer-to-peer file-sharing) traffic. As networks go all IP, there needs to be a set of guidelines for peering traffic and network management. I don't think the FCC or Congress should be the ones making these rules. Any rules they come up with will be a compromise that will ultimately solve nothing, but create new problems.

The final debate in DC is about Fair Competitive Access to the telco infrastructure. After court rulings and Forbearance petitions in 2004-06, CLEC's and ISP's have been losing ground in the ability to get access to telco network elements to provide service to customers at a fair and competitive price. In so many cases, the CLEC "wholesale" rate is higher than retail. Make sense? Docket 05-25 at the FCC is the Notice of Proposed Rulemaking on Special Access Rates. 

While they may seem similar in that they are all about access to the network, they all are about different aspects of the network access. In the end, Open Access Rules and Net Neutrality guideleines will define how we use the networks for innovation, collaboration and communication.

Engadget has a rumor that Deutsche Telekom is eyeing Sprint Nextel for acquisition. There are a number of issues here:

1. DT owns T-Mobile.
2. T-Mobile is GSM and Sprint is iDEN and CDMA. Not much value in mixing that many signaling protocols. No synergy.
3. FTC and DOJ may not like that much Public Safety being foreign owned.
4. The cost would be staggering.

By that I mean that DT isn't exactly experiencing huge growth to pay back a multi-billion dollar acquisition of a declining asset. And Sprint is declining. If DT did want to enter the US, it could have bought Virgin Mobile as a foothold. Or done a JV (joint venture) with SK Telecom. These would have been easier and cheaper acquisitions.

UPDATE: MarketWatch article about possible merger and Reuters notes the rise in Sprint's stock and bond prices on these rumors. From this you can almost feel that the bankers are floating a balloon to take advantage of the deltas.

 Thanks to the Arkansas Democratic Gazette for the chart.

Despite a big drop in earnings and revenue for the first quarter 2009, Windstream still managed to buy some more lines and customers by snatching up D&E Comm.

D&E Communications is an ICP, an  integrated communications provider, offering residential Voice, Video, Broadband and On-Site Computer Support services as well as business-class Networking, Business Continuity, IT, Security, Voice and Training solutions. D&E is an ILEC and a CLEC.

This stock-and-cash deal (worth about $330M)  "nearly doubles the company's operating presence in Pennsylvania with the addition of approximately 165,000 access lines and about 44,000 high-speed Internet customers."  That's about $2000 per subscriber.

"D&E Communications generated $148 million in revenue and $64 million in operating income before depreciation and amortization (OIBDA) in the twelve months ended March 31, 2009."  So the buy is about 2x Annual Revenue for those hoping to play at home.

"The transaction also includes six wireless licenses for 700 MHz spectrum covering a population of approximately 1.3 million in central Pennsylvania," according to the press release. 

While Windstream isn't having a strong quarter with dipping revenue, it is doing okay selling Internet and TV. It passed 1 million high-speed Internet subs by adding net 31,000 this quarter. In addition, more than 21,000 digital TV customers were added, bringing the total TV count to about 295,000. "It also recently finalized an agreement with DISH Network to sell digital TV to Windstream's commercial customers, Gardner said."

 

How does this work?

"AT&T Inc said Friday it will buy the bulk of Alltel Wireless assets being divested by Verizon Communications Inc for $2.35 billion, and will sell some Centennial Communications Corp assets to Verizon Wireless for $240 million." [telecomengine]

When they say divest assets, it's suppose to increase competition. Swapping assets between the two biggest players is not what was meant. "Verizon previously had said more than 30 companies had expressed interest in the Alltel assets." I guess only one was REALLY interested. (This burns my rear. Copps needs to say something - maybe block Ma Bell from buying Centennial.

Also, one is CDMA (VZW) and the other GSM (ATT). How do they even use the assets purchased?

"Under terms of the deal, AT&T will buy licenses, network assets and 1.5 million subscribers in 79 service areas, mostly rural areas in 18 states, the company said in a statement. .... Verizon now expects to buy former Centennial wireless properties, including licenses, network assets and nearly 120,000 subscribers in five service areas in Louisiana and Mississippi."

CircleID takes a look at America's Broadband Score

"Leonard Waverman, the dean of the Haskayne School of Business at the University of Calgary, describe a measure he developed called the 'Connectivity Scorecard.' It's meant to compare countries on the extent that consumers, businesses and government put communication technology to economically productive use. Even after deducting the untold unproductive hours spent on Facebook and YouTube, the United States comes out on top..."

What's interesting to me is the comments. How no one can find the US Broadband score is funny. (Heard of Google much?) It isn't so much the score as what the score represents.

We have a few problems to fix:

(1) ISP Competition for one. Many places only have one choice for broadband. Many have two - cable or telco. Few have three. It makes download caps and Net Neutrality a hot button that true competition would eliminate. (And please don't give me that 3G is the third rail because guess who owns that - Ma and Pa Bell in the majority just like they own the Internet backbone and the PSTN structure in more than 70% of the country).

(2) A definition of broadband. Is it 256k one way as the FCC has defined it for years? Is it now the new FCC definition of 768k? Or is it 1M x 1M minimum? Or is it 100Mbps? This would certainly help.

(3) Deployment versus Penetration. "When you look at the 2008 ITIF Broadband Rankings report ...the U.S. ranked 15th among industrial nations at a composite score of 10.25. The U.S. is reported to have an average download speed of 4.9 Mbps, which is a far distant behind Japan's 63.6 Mbps. In addition, the report states that the US broadband penetration comes in at 0.57%." [source] Here's the detail: "Composite Score: Each nation's overall score is the sum of its standard deviation score for each of the three indicators: Household penetration or subscribers per household, average download speed in Mbps and price at the lowest monthly cost per Mbps." 

We may have "broadband" deployed in a large swath of America, but the speed is low compared to other countries. Because we are a suburban and rural country, it takes more infrastructure to hit everywhere with broadband, especially very high-speed Internet Access (greater than 3Mbps). And because most places hit are single family homes - we do live in suburban sprawl consisting of McMansions filled with Yuppies and 2.2 kids - it also affects our score at the ITIF.  According to a CWA study, the speed in the US is just over 2Mbps.

(4) Cost! We probably pay more per MB than any other G8 country. We get less speed and pay more for it. That hurts us. Surprisedly, in Wilson NC, the Muni fiber sells 100MB symmetric while TWCable and Embarq just gape at the speed and price. Well, not gape, so much as sue that it's unfair that a city would provide services it refuses to.

So we have cost, penetration, subscriber per household (density), and speed. Can't do much about density, but you can improve speed and cost. Also, there is a Digital Divide in America. Poorer families do not have computers, so do not have a need (or a budget) to buy broadband. It poses a problem that funding broadband for libraries and schools is supposed to throw a rope at. The Pew Report reflects this chasm.

BTW, the Connectivity Scorecard study has been analyzed here and by my favorite snarky blog, TechDirt.

Washington, D.C. - October 27, 2008 - Many Americans, especially those living in rural areas have never had affordable broadband Internet access.  In a letter filed with the FCC last week, WISPA, the Wireless Internet Service Providers Association (www.wispa.org), showed the FCC how it can make valuable TV White Space spectrum available for new services.  The FCC is scheduled to vote on November 4 on how this spectrum can be used after the DTV transition occurs in February 2009.

WISPA offered a detailed "licensed-lite" solution for unused TV channels.  Unlike expensive spectrum auctions and "noisy" unlicensed spectrum, the "licensed-lite" approach relies on a spectrum sharing system that enables all users to operate without interference.  It would benefit the public by allowing the development of new and innovative types of unlicensed broadband devices and services.  It would also benefit WISPs by improving the service range of their existing networks, thereby allowing WISPs to reach new customers.  WISPA's proposal also ensures that consumers will continue to receive over-the-air television signals without interference.

Rick Harnish, WISPA's President, said "We believe adoption of our "licensed-lite" proposal will stimulate rural economies around the nation by enabling low cost ubiquitous broadband service from local and regional operators.  Children growing up in small towns deserve the same opportunities created by broadband adoption as those children in metropolitan areas.  Small businesses and rural entrepreneurs are the lifeblood of a growing economy and we encourage the FCC Commissioners to do their part in reviving Rural America."

Jack Unger, WISPA Secretary and Chair of WISPA's FCC Committee, added, "We believe that there are enough White Space frequencies for all wireless users to share, without creating interference. Our "licensed-lite" proposal adopts a "common-ground" approach that benefits all users without relying on controversial "spectrum-sensing" techniques.  Our technical solution uses a geolocation database that makes frequency sharing work. We urge the FCC Commissioners to adopt our "licensed-lite" proposal at their November 4th meeting because we believe it truly represents a "win-win" solution for all parties."

Since 2004, over 30,000 comments have been filed with the FCC suggesting how the White Space frequencies should be used.  Broadcasters want to be sure that new White Space users will not create interference with television reception.  Silicon Valley firms favor unlicensed use for personal/portable devices that would rely on the controversial "sensing" technologies opposed by broadcasters.  WISPA's "licensed-lite" approach represents a middle-of-the road solution that accommodates all of these interests.

[The ex-parte  notice is here]

FOR MORE INFORMATION - CONTACT:

• Jack Unger, Chair WISPA FCC Committee  818-227-4220
• Stephen Coran, Principal, Rini Coran, PC  202-463-4310

More on the issue here.