Tag Archives: 4G

4G is not 4G without the backhaul to support it

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“4G is not 4G without the backhaul to support it,” said Sara Kaufman, an analyst who follows mobile operator strategy for Ovum, speaking today at the CTIA Enterprise & Applications conference in San Diego. Mobile carriers have to start by connecting cell sites to fiber networks when they upgrade their networks to 4G speeds using LTE technology.

She predicted robust growth for LTE-based 4G mobile data service in the U.S., but had trouble explaining exactly why. There’s “no convincing evidence of LTE services generating new revenues”, Kaufman said, pointing to another barrier to faster growth for the technology. So far, LTE lacks a killer app or new services that would make it more valuable to subscribers.

Subscriber adoption has been lackluster. Only 2% of Verizon’s customer base currently subscribes to LTE service. Kaufman does not see widespread demand for it, because mobile phone companies have not given consumers a compelling reason to buy a new phone and upgrade their mobile data service.

Even so, she believes LTE deployments are inevitable, citing figures from Ericsson that show smart phones use ten times the data that conventional, dumb phones use, and larger devices – laptops and, presumably, tablets – use ten times as much as smartphones.

Her case for LTE is made by cost savings, not revenue. The result is slower build outs, particularly for carriers that have deployed HSPA+ networks in the interim. “Eventually operators will have to move to LTE,” she concluded, “but there’s no rush to do it.”

Genchowski has an activist agenda for the FCC

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FCC chairman Julius Genachowski delivered the opening keynote at the CTIA IT and Entertainment conference today. He offered good of idea of what he has in store for the industry, and gave us a feeling for who he is.

If you take him at face value, the FCC is going to be the wireless industry’s best friend. And the consumer’s best friend. In fact, everybody’s best friend.

Genchowski unveiled what he called the FCC’s mobile broadband agenda:

1. “Unleashing spectrum” for 4G service. He said mobile broadband usage is exploding, and the FCC has to promote more efficient use of spectrum.
2. Remove obstacles to 4G deployment, for example by streamlining the tower siting process.
3. Develop fair rules of the road for the Internet. He said it’s important to ensure the Internet remains open, and that the FCC has to empower entrepreneurs, not lawyers.
4. Empowering consumers by supporting a transparent marketplace. He also said vibrant and competitive marketplace, but he focused on transparency — nominally more information for consumers — as the means to fostering greater competition.

He clearly intends to be an activist FCC chairman. His plans would create a bigger role for the FCC in regulating the telecommunications industry, wired and wireless, telephone, cable and broadband alike.

The better the available information, the better a free marketplace will work in theory. That’s fine. But it’s a short step from requiring better information to trying to actively manage the workings of the market, and then to dictating outcomes.

The point wasn’t lost on Ralph de la Vega, CEO of AT&T Mobility and the second keynote speaker. He thanked Genchowski for his stated good intentions, but quickly hit back, saying we (presumably meaning America if not the entire world) need an Internet free of “burdensome regulation”. He said the Internet is open now, and needs to stay that way.

In a genuine debate, it would have been difficult for de la Vega to make the case that the particular corner of the Internet that he is responsible for is open. Like all U.S. mobile carriers, AT&T manages what subscribers can do with their bandwidth, and what devices they can use.

On the other hand, Genchowski would have been equally hard pressed to explain how a more activist regulator will lead to greater market freedom. Creating “fair” rules and “empowering” particular market players is in fact the reverse of letting the market operate.

Even free market economists usually allow that natural monopolies, such as telecoms networks, need some degree of regulation, so there’s clearly a role for the FCC to play. If that role is limited to increasing transparency and improving the ability of consumers to make economically rational choices, Genchowski and de la Vega should have no argument between them.

Will Genchowski so limit himself and his colleagues? I did not leave with the feeling that he sees himself as a simple referee. Rather, his enthusiasm is palpable for the work he laid out. I expect he will lead an FCC that increasingly sees itself as an industry player, at the least co-equal with the private sector, and sitting on the opposing side of the table.

Maybe Genchowski really believes he can foster entrepreneurial growth through federal regulation, rather than creating a bull market for Washington lawyers, lobbyists and special interests. If he does, he needs to explain how.