The Federal Communications Commission is on a mission to slow down broadband in rural areas. Or at least protect incumbents who don’t invest in their networks in rural markets where competitive options are few to non-existent.
The latest move approved by commissioners sets a low bar for mobile broadband service. Similar to its Connect America Fund program that subsidises fixed, mostly wireline service in communities with sub-standard Internet service, the FCC administers the Mobility Fund for mobile carriers. In order for qualify for subsidies under the plan reaffirmed by the FCC earlier this month, existing mobile broadband speeds have to be below 5 Mbps download, with no standard at all set for upload performance.
That’s in contrast to the wireline subsidy program, which sets 10 Mbps down and 1 Mbps up as the minimum. Rural carriers wanted the FCC to use the same standard for mobile service, and in the process make more areas eligible for subsidies. But the FCC didn’t buy it, arguing that they have to establish service levels that are “reasonably comparable” to what’s available in urban areas and, contrary to what they advertise, the big mobile carriers say they don’t do all that well…
Although [the rural wireless carriers group] claims that the median download speed provided by nationwide carriers is approximately 12 Mbps, Verizon counters that, depending on demand, consumers in an urban market may see service slower than 5 Mbps. Furthermore, despite the fact that providers have used different standards and methodologies to report coverage…the nationwide carriers are all generally reporting minimum advertised download speeds of 5 Mbps for their 4G LTE network coverage.
Other national mobile carriers, including notably T-Mobile, made similar arguments. It’s funny how they try to sell customers on blazing fast performance, and then turn around and trash talk it when it’s time to protect their poorly served rural turf from subsidised competition.
The Trump administration’s FCC is also considering lowering the standard for advanced service from the current 25 Mbps down/3 Mbps up level to 10 down/1 up, at least for mobile broadband, another move that would please big incumbent telcos and cable companies and help protect their monopoly business models.
Making much of the rural U.S. a competition-free safe zone for incumbents is the wrong thing for the FCC to do, and sanctioning lower broadband speeds at a time when demand is skyrocketing is the wrong direction to take.
Voice telephone service has finally tipped to predominantly mobile, according to statistics compiled by the federal department of health and human services. The latest survey shows that a bit more than half the homes in the U.S. no longer use landline telephones to make or receive calls…
In the second 6 months of 2016, more than one-half of all households (50.8%) did not have a landline telephone but did have at least one wireless telephone. More than 123 million adults (50.5% of all adults) lived in households with only wireless telephones; over 44 million children (60.7% of all children) lived in households with only wireless telephones. The percentage of households that are wireless-only and the percentages of adults and children living in wireless-only households have been steadily increasing. The observed 2.5-percentage-point increase in the percentage of households that are wireless-only from the second 6 months of 2015 through the second 6 months of 2016 was statistically significant. The 2.8-percentage-point increase for adults and the 3.0-percentage-point increase for children across the same 12-month time period were also significant.
It’s a significant milestone, but it should be read for what it is – a measure of how people make voice calls. It doesn’t say anything in particular about how people access the Internet.
The distinction is important because telephone companies, and AT&T in particular, continue to push lawmakers and regulators to allow them to rip out copper wireline networks and replace them with wireless service. When they make those arguments, they wave statistics like these and claim that people don’t need wired connections anymore, while deliberately distracting them from the facts that 1. many mobile voice-only homes connect to the Internet via wired connections and 2. mobile data is very expensive and slow compared to even legacy DSL technology, particularly in rural and inner city communities.
Voice is migrating to mobile, although there will be demand for landline service, too, for many decades to come. Don’t confuse it with broadband service, which continues to see increasing in-home demand for speed, capacity and reliability that only wired networks can deliver.
Wireless Substitution: Early Release of Estimates From the
National Health Interview Survey, July–December 2016
Not so bright in rural California
Competition works. Even in the telecoms business. Referencing an article in the Wall Street Journal, FierceWireless is reporting that the cost of mobile data has dropped 13% in the past year, and the reason is increasingly heated competition between the four major carriers, with reintroduction and aggressive marketing of unlimited data plans at the top of the list…
In a detailed article on the topic, the Wall Street Journal reported that the cost of wireless service plans fell 7% in March and an additional 1.7% in April. When comparing April data against the same month last year, the publication reported that wireless service prices have declined by almost 13%. The WSJ cited the Labor Department’s consumer price index for the numbers; the Consumer Price Indexes (CPI) program “produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services,” according to the agency.
The effect was so great that the CPI went into negative territory for the first time in seven years. Mobile pricing wasn’t the only reason, but it accounted for about half the drop.
One significant caveat, though, is that the CPI is based on urban costs. The price of mobile data wouldn’t be different in rural areas, but its availability and the way it’s marketed is.
A quick look at the California Public Utilities Commission’s broadband availability map shows that while people living in urband and suburban communities enjoy the full benefit of four aggressively competing mobile broadband providers, those in rural areas do not. And while the same plans might be available everywhere, different needs push people in different areas toward different packages.
For example, plans designed to be used in homes as a wireline substitute of sorts are more popular in rural communities – the article did not look at whether prices for those particular packages are likewise experiencing the same, downward competitive pressure, but from what little I’ve seen it would appear not.
Another attempt to build an alternative to the Android mobile operating system is circling ever closer to the drain. A Nokia spin-off, Jolla, is laying off about half of its employees because an expected new round of investment didn’t come through. That means that development of its Sailfish operating system will be on the back burner. According to a story in TechCrunch, Jolla’s chairman, Antii Saaarnio, they need the money in order to hang onto talent…
“We are of course hoping that these are temporary actions… And we are committed to continue the company but really this depends on the external investors as well, how are we able to continue operations,” Saaarnio adds…
However he concedes it would be unable to retain the talent and fund the expensive development work needed to ensure its Sailfish OS is competitive against more well-resourced mobile OS rivals.
The main problem is that Jolla was relying on a single, unnamed strategic investor to pony up the new round of cash. I’ve seen that scenario play out in several start ups personally. Strategic investors don’t tend to be interested in a new product itself, but rather in either the opportunities it might create for their primary line of business or in the leverage it can give them in negotiations with competitors. Once they get what they need, there’s no reason to keep pumping money into the project.
Jolla has already slow tracked plans to manufacture phones to go along with the Sailfish OS, focusing instead on licensing it to companies in developing countries. So far, it has one licensing deal signed with an Indian manufacturer; no phones are on the market yet.
Chinese smartphones loom larger.
Trying to track shipment figures for any global consumer electronics product can be a tricky business – piecing together the puzzle requires access to many sources with many agendas – but that said, market research company TrendForce has spotted a significant trend: collectively, Chinese smartphone manufacturers grabbed a huge share of the worldwide market in 2014.
According to TrendForce, manufacturers shipped 1.2 billion smartphones last year, with Chinese companies accounting for 450 million, or 39% of the global total.
Lenovo (with the Motorola brand rolled in) was 2014’s third ranking smartphone maker, with a 7.9% market share. That’s up from 4.9% in 2013. Huawei came fifth at 5.9%, barely behind fourth-ranked LG at 6.0%.
The top places haven’t changed, though. It’s still Samsung first and Apple second. Even though it’s still overwhelming at 28%, Samsung share slipped from 33% in 2013. Apple’s held more or less even – 16.4% in 2014 against 16.6% in 2013. It’s not like either one is fading though. Samsung shipped 25 million more units than in the previous year; Apple sold 37 million more.
Both Huawei and Lenovo made a big push at last year’s Consumer Electronics Show, and ZTE boosted its presence at the 2015 CES. Although home market strength puts Chinese brands in the top ten, exports are also growing.
The 2014 rankings are also notable for the names that are missing. Nokia and Blackberry fell into the vast Other category, their places taken by Xiaomi and TCL. Another way of looking at it: Apple aside, the top ten smartphone brands are Android-based (or nearly so, there’s a bit of dabbling in alternatives like Tizen and Firefox). Windows and Blackberry are off the radar.
Don’t subsidise old, slow broadband technology. That’s one of the conclusions of an analysis of mobile broadband performance done for the California Public Utilities Commission (H/T to Jim Warner for the pointer).
Right now, the CPUC’s minimum service availability mark is 6 Mbps down and 1.5 Mbps up – if a community gets less than that, it’s eligible for broadband infrastructure subsidies from the California Advanced Services Fund. Conversely though, to get those subsidies, broadband projects only have to meet that level of service – the minimum is good enough.
After running millions of field tests at thousands locations around California, the CPUC’s study concludes that mobile carriers can do better if they try, and if they don’t, they should get CASF money…
The speed of deployment in mobile broadband service can support a new benchmark standard of 10 Mbps down and 4 Mbps up based on the deployed capabilities of modern LTE networks. When subsidizing mobile deployment, it would certainly be prudent to require deployment at speeds of at least 10 Mbps down/4 Mbps up, properly configured to be able to provide VoLTE and other real-time streaming services.
The FCC has met the science halfway: its new standard is 10 Mbps down, although up remains at a sluggish 1 Mbps.
The CPUC is developing a test that can make similar measurements of wireline service. That’s harder than assessing mobile carriers’ performance, which can be measured by simply driving around the state. Getting real world stats for wireline service means either installing measurement gear inside people’s houses – as the FCC does – or getting them to run tests themselves.
If comparable data for wireline network performance becomes available and it likewise shows there’s no technological reason new infrastructure can’t meet a higher standard, expect a move to raise the broadband bar overall for Californians.
Some form factors just work
The hot, new innovation from Blackberry last week is a small phone with a small, physical keyboard. Sound familiar? If not, Blackberry is helpfully calling it the Classic.
There is no shortage of people – Barack Obama and Arianna Huffington included – who like the 1990s Blackberry look. It offers unique functionality and the company’s new management is happy to provide it.
When I look at new products that catch on quickly, there’s a question I always ask myself: is the success due to designers offering consumers a genuinely new benefit, a way of meeting either a preexisting or completely new need? Or have they just identified a need without completely fulfilling it? In other words, is it a bridge product that’s merely the best that’s possible now?
The Apple Newton was a bridge product, one that identified the need and temporarily filled it until a truly useful solution was developed. So did the Palm Pilot. It’s starting to look like the iPad might go that way too. But the original Blackberry design still does what it was originally intended to do better than anything else, at least for some people. Messages, calls and contact and calendar info are accessible via a pocketable phone with a keyboard that many find comfortable.
The classic Blackberry is here to stay, just like the flip phone: it’s a convenient way of putting a limited set of important functions in a package that’s small, rugged and boasts a long battery life. Few people will make it their first choice, but many will love it as their second phone, the company phone they carry for their job or the one they stuff in a pocket on the weekend.
Blackberry will never regain its former glory, but by distilling the brand down into a solid niche it’s taking the penultimate step towards ensuring it will live on in the mobile ecosystem. The final – and necessary – move will come if and when it opens up to other operating systems.
Ken Biba, from Novarum Inc., briefed California Broadband Council members yesterday on the results of mobile broadband testing conducted by the California Public Utilities Commission. He reiterated conclusions previously published regarding the mobile broadband divide between rural and urban areas in California.
“It’s a one carrier state and it’s Verizon”, Biba said. Although AT&T has built out into rural areas, too, its service isn’t as available or well performing. As for the rest, “I can’t advise anyone to get a Sprint phone or a T-Mobile phone because you’re not going to get service”, he said.
There’s a wide variation in service, ranging from the best measurements on Verizon’s network along the Mexican border, to great gaping holes in the Sierra and along the northern coast. Where you are and who your carrier is determines the quality of your mobile broadband service, as does the device you’re using and the websites you’re frequenting. But as for the commonly heard claim that time of day determines mobile broadband performance, “it’s largely bullshit”, Biba said.
The data also points to the need for more fiber – and more access to existing fiber – particularly in rural areas. Once a mobile broadband connection hits a rural tower, it slows down. “There’s a 40% latency penalty for rural users over urban users”, Biba said, emphasising that this finding was preliminary and more research would be done to confirm (or rebut) it. Even so, “I think it’s real”.
In what was effectively a lame duck session, the council also heard telecoms regulators from New York and the Virgin Islands talk about the challenges they face, and closed out the session by thanking everyone, and particularly CPUC staff, for past years of support. Neither Alex Padilla nor Steven Bradford – outgoing state assembly and senate representatives respectively – attended. It’s also the last meeting for council chair – and CPUC president – Michael Peevey. Of the principal members (the others are staff representatives from various state agencies) only Sunne Wright McPeak, president of the California Emerging Technology Fund, will return next year. The council wrapped up the meeting by electing Carlos Ramos, head of the California Department of Technology and the state’s CIO, as the new chair, beginning in January.
Ten years isn’t so long. Unless you’re a dog. Or the Internet.
The possibility of converting prime spectrum from TV broadcasting to mobile broadband use has been pushed off another year. The FCC is delaying the planned auction of 600 MHz broadcast frequencies until 2016, instead of next summer.
It’ll take that long to sort out a lawsuit filed by the National Association of Broadcasters – the primary lobbying organisation for TV and radio station owners – according to the FCC…
Earlier this week, the court issued a briefing schedule in which the final briefs are not due until late January 2015. Oral arguments will follow at a later date yet to be determined, with a decision not likely until mid-2015. We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016.
In an odd sort of statement, the NAB claimed the delay isn’t its fault. The process should take a long time. Or something like that…
As NAB has said repeatedly, it is more important to get the auction done right than right now. Given its complexity, there is good reason Congress gave the FCC 10 years to complete the proceeding. We reject suggestions that our narrowly focused lawsuit is cause for delay.
Neither broadcasters nor mobile telecoms companies have shown universal enthusiasm for the auctions, which, it is assumed, would raise billions of dollars, some of which would compensate broadcasters for the transferred spectrum and the rest would pay for upgrading U.S. public safety networks.
But the mobile bandwidth crunch is not slowing down, and that’s a problem that will impact everyone’s prosperity and quality of life. Ten years is way too long to wait.
Cities and counties are still in control of their own property, at least concerning decisions about where to install wireless broadband facilities. In a recent ruling that tightens the limits on how local governments may regulate cell towers, antennae and other wireless infrastructure, the FCC said those rules don’t apply when cities are simply acting as landlords…
Courts have consistently recognized that in “determining whether government contracts are subject to preemption, the case law distinguishes between actions a State entity takes in a proprietary capacity— actions similar to those a private entity might take—and its attempts to regulate.”…Like private property owners, local governments enter into lease and license agreements to allow parties to place antennas and other wireless service facilities on local-government property, and we find no basis for applying [these restrictions] in those circumstances.
In fact, cities can go a little further and craft rules that create a preference – in some cases a requirement – for installing wireless facilities on public, rather than private, property…
Most industry and municipal commenters support the conclusion that many such preferences are valid. For example, some commenters assert that such preferences are not unlawfully discriminatory as a general matter, but that they can violate [federal law] if they effectively “pressure” applicants to use municipal property or are coupled with ordinances making it too onerous to site anywhere else…however, determining whether a particular municipal property preference violates [federal law] depends on the specific details of the preference and related requirements…Therefore…we decline at this time to find municipal property preferences per se unlawful.
It’s hardly a blank check. Local governments can’t keep towers, antennae or other equipment off of private property, even if a city-owned site is available, but a certain amount of encourage is allowed.
With this latest ruling, cities have even less of a stick to wave at wireless companies, but retain the right to use public property as a carrot to creatively influence where facilities are built.