Google Promises “One Bill” with Android Broadband Tethering

Posted on July 24, 2010 by

In a compelling keynote to the Google I/O 2010 conference, Google’s vice president of engineering, Vic Gundotra touted the possibility of combining those home broadband and mobile data bills into one bill with laptop/desktop tethering using Android 2.2.

“If you are like me you have a plethora of devices you carry around with you, … your android device can in fact become a portable hotspot and really serve the needs of these other devices you might have with you.  [With] Nexus One running Froyo, … [you can go right into tethering and portable hotspot and then] go to another device that doesn’t have connectivity, how about [an] iPad, and there you go.  One bill.”

It appears from the FCC’s most recent report on broadband adoption that something like 35 million Americans may not subscribe to mobile data services as part of their plan.  The last column of this chart from the report illustrates this fact:

Broadband Penetration in the USA, 2005-2008

Broadband Penetration in the USA, 2005-2008

Many Americans no doubt cringe at the prospect of two monthly data bills of $30-50.   In an April 2010 survey, “more than twice as many respondents said they had cut back or cancelled a cell phone plan or cable TV service than said the same about their internet service.”  The development of Android and its use as a portable hotspot might persuade many of these Americans to switch to mobile data plans.

Tethering has been available for both Mac and Windows users with iPhones for a while, but it previously required some tinkering to activate if reports like this one from CNet are to be believed.  For those Internet users longing for “one bill” but hesitating to sign a two-year contract with AT&T, Android 2.2 might be a desirable option.  The keynote presentation from Google I/O 2010 is here:

Posted in FCC, Uncategorized | 3 Comments

Technology Competitiveness in South and Central America (Part I)

Posted on July 24, 2010 by

Living and teaching in Miami as I do, I thought I would take a look at how the Internet and broadband connectivity are developing south of the border.   The result seems to be that the further south one travels in the Western hemisphere, with the exception of Canada, Mexico, and the United States, the more popular the Internet and broadband seem to be.   Let’s start with a map of the region, courtesy of the U.S. Geographical Service.

"Map of Central America"," Map of South America"

Maps of Central and South America

Internet and broadband usage seems to be lagging the most in the northern part of Central America right up to the Mexican border.  This is apparent from the following chart based on data available at the International Telecommunications Union Web site:

"Broadband Penetration in South America", "Broadband Penetration in Central America"

Broadband Penetration in South and Central America

So that with a few exceptions (notably Mexico in the north and Paraguay in the south), Internet subscriptions as well as broadband subscriptions can be between 1.6 to 10 times greater as a percentage of population in the so-called Southern Cone of  Argentina, Chile, and Uruguay as in the Central American Common Market countries of Guatemala, El Salvador, Honduras, and Nicaragua.

The 2009 report of the Berkman Center for Internet and Society at Harvard Law School on broadband penetration throughout the world pointed out that income, education, and urban density within a country explain 75% to 85% of variation in broadband penetration, according to recent studies.  The following chart illustrates how income and Internet usage generally track one another in Central and South America:

"Broadband Penetration," "Average Income," "South America"

Broadband Penetration and Average Income in South and Central America

As the Berkman Center also pointed out (p.44 of the report), policy tools are available to countries to increase their technology competitiveness.   Thus, it appears from the chart above that some countries, like Brazil and Bolivia, may be outperforming what their income per capita (and probably their education and urban density statistics as well) would predict, while others, like Panama, Belize, El Salvador, and Guatemala, are significantly lagging when in comes to Internet usage.  One explanation may be that Brazil and Bolivia used aggressive investment in state-owned companies to increase the accessibility and reduce the cost of broadband subscriptions.  Another explanation may be that the wars in Central America during the 1980s and 1990s damaged telephone infrastructure.  In that regard, it is noteworthy that Central American countries have respectable, and sometimes very high, levels of mobile cellular subscriptions, as shown here:

"Mobile Phone Subscriptions" ," "South America"

Source: ITU

Hopefully, in a future post I will explore other aspects of and explanations for differing levels of technology infrastructure deployment throughout Central and South America.

Posted in Broadband, Uncategorized | 2 Comments

Linkage

Posted on July 23, 2010 by

Links from around the series of tubes:

- Tech companies pay Congress a lot.

- Telcos continue losing ground to cable in broadband subscribers.

- Data caps don’t seem to have an economic justification.

- But they do seem like a good way to protect video revenues.

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McDowell’s Disappointing Op-Ed

Posted on July 23, 2010 by

Commissioner McDowell’s WSJ op-ed is disappointing — and more inflammatory than informative.  He compares, for instance, the FCC’s attempts to maintain decades-old protections of Internet freedom to dictatorial repression in places like Iran and North Korea.  He can do better than this.

The op-ed’s main argument is that the FCC shouldn’t maintain these traditional Internet protections (i.e., Title II reclassification) because they could trigger international regulation of the Internet, and could encourage other states to regulate the Internet.  But there are, however, several problems — and even inaccuracies — in his arguments.

First, McDowell is simply inaccurate in suggesting that reclassification could trigger a “cascade of international regulation of the Web” by the ITU (the International Telecommunication Union, an UN agency).  The ITU has no enforcement mechanism, relying instead on negotiations.  Plus, there’s currently no treaty on Internet regulation anyway — and the United States could always opt out of parts of it, assuming it even existed.  Which it doesn’t.  So I’d be very curious to hear some follow-up questions from the press on how exactly this cascade of regulation could flow from an agency without an enforcement mechanism.

Second, McDowell mischaracterizes the reclassification debate in several respects.  The point of reclassification is to protect Internet freedom.  It’s about restoring the traditional protections that have existed for decades, and that the FCC sought to eliminate in 2002.  These regulations are not anti-market — they’re market-creating and market-protecting.  An open nondiscriminatory platform (much like government-enforced property rights) creates a foundation for free competitive deregulated markets “on top.”  Reclassification does not apply to content or applications markets.  It’s entirely about preventing the carriers themselves — as physical network owners — from limiting traditional Internet freedoms. That’s why reclassification is consistent with the State Department’s commendable efforts to promote Internet freedom.

And McDowell knows all this.  But he obscures the point by implying that regulations designed to maintain a free and open physical network are “regulating the Web.”  Even worse, he suggests that these protections of Internet freedom are similar to Internet repression in states like China.

McDowell’s history is also misleading.  He writes that the Internet has been “open” since it was “privatized in 1994.”  In reality, however, the Internet at that time (which was primarily dial-up) was “open” because government required it to be open.  The traditional nondiscriminatory protections continued to apply even after 1994 (at least to dial-up).  It was in this regulatory environment (and because of this regulatory environment) that the Internet’s growth exploded as literally thousands of providers emerged.

In short, reclassification is about ensuring Internet freedom — not reversing it.  Failure to follow through would allow carriers to impose many of the very restrictions on Internet freedom that McDowell is worried about.

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D Block Blues

Posted on July 23, 2010 by

You know it’s an exciting day when the top headline is… the D Block!  And the big D Block news is Senator Rockefeller’s forthcoming bill, which would nix the FCC’s plan to auction the D Block spectrum to commercial carriers.

Cecilia Kang has a pretty good rundown of the bill.  The main dispute is over how this valuable spectrum should be allocated.  The FCC wants to auction the spectrum to commercial carriers, and then use the money to construct a national public safety network.  Public safety agencies, by contrast, want the spectrum to be allocated directly to them.  (Public safety already has 10 MHz of adjacent spectrum — so the bill would give them 10 MHz more).  Rockefeller’s bill sides with the public safety organizations.

A few thoughts on this:

First, the FCC’s plan seems more realistic.  Everyone agrees that public safety needs better networks.  And giving them more spectrum sounds good in the abstract.  But the key question is the ability to follow through.  Remember that the earlier D Block auction failed because private capital refused to front the costs of building a national network.  (The initial D Block auction required the auction winner to build out a new public safety network.  No one signed up.)

The FCC, wisely, decided on a more realistic course.  To generate revenues, the FCC proposed auctioning 10 MHz to commercial carriers, and then using the billions in proceeds as a down payment on a new national network on public safety’s existing 10 MHz.  It’s not ideal, but it seems more realistic.  The Rockefeller bill, by contrast, seems like a recipe for keeping the D Block idle forever.

Second, it’s interesting that Verizon and AT&T (alone among wireless carriers) support the Rockefeller bill.  As Kang’s sources note, that’s because they don’t want smaller competitors to get such good spectrum.

That’s all perfectly rational of course — but it tends to vindicate skeptics of wireless industry consolidation (and spectrum consolidation in particular).  The skeptics’ fear is that AT&T and Verizon will hoard spectrum that they aren’t using simply to prevent competitors from snatching it up and developing it.  The carriers’ position on the Rockefeller bill suggests these fears are more than theoretical.

(Disclaimer:  I worked years ago as a lowly associate on this stuff on behalf of now-defunct Frontline).

Posted in FCC, Public safety, Spectrum | Tagged , , | Leave a comment

FCC Broadband Report: The Good, The Bad, & the Ugly

Posted on July 22, 2010 by

The FCC’s broadband report (pdf) is essentially the “State of the Union” for broadband.  As it turns out, the state of our broadband is, well, not so strong.  And the FCC deserves credit for finally saying so.  But the report could also be much better.  So here’s a quick summary of some of the report’s best and worst features.

The Good

The big story is the FCC’s official conclusion that broadband is not being sufficiently deployed to all Americans.  It’s the first time the FCC has ever reached this conclusion.  The previous reports had all concluded that broadband deployment was just fine, thank you.  So what changed?  Basically, the 2008 election.*

Also to the good, the FCC revised its definition of “broadband” by requiring higher speeds.  Prior to this report, the FCC had — absurdly — treated network speeds of 200 kbps as “high-speed broadband.”  To provide context, you need network speeds 5 to 20 times faster (1-5 mbps) just to view a standard video stream — much less a high-definition one.  The new definition ups those speeds to 4 mbps download/1 mbps upload.  That’s better, though still not very good.

Next, the FCC implicitly suggests that the National Broadband Plan (NBP) underestimated the number of “unserved” Americans — i.e., those who lack access to high-speed broadband.  The NBP estimated that 14 million Americans were unserved — a number that was both too low and based on several flawed assumptions (pdf).  The new report includes an additional estimate that puts that number around 24 million.

Finally, the report concluded that market forces alone cannot fill our broadband gap.  Policy will have to change.  This conclusion arguably strengthens the case for restoring the traditional regulatory classification of broadband access to allow the FCC to actually do something about this gap.

The Bad

The report’s not all sunshine and roses though.  It’s a big improvement, but it still comes up short in important ways.

For one, the required speeds are still far too low.  Networks with 4 mbps capacity simply aren’t enough for new services like high-def video, good quality standard-def video, telemedicine, and a million other things.  Those speeds are also laughable compared to what international users are enjoying.

Also, the report still seems to underestimate the number of unserved Americans — even using 4 mbps/download as the baseline.  As I understand it, the FCC only treated a county as “unserved” if less than one percent of its households had broadband.  That’s an improvement over the old “one person is enough” standard, but it’s still a problem.  For instance, let’s say that 5% of households in one dense corner of a county had broadband, while the other 95% had nothing but dial-up.  Under this standard, the entire county would be considered 100% served.  The upshot is that we still need better and more granular data.

In sum, a much improved report that deserves praise — but also one that needs even more improvement.

(*The initial reports came during the Clinton era, but the state of deployment was much better then.  It’s only in the last decade that we’ve fallen significantly behind the rest of the world across a number of metrics).

Posted in Broadband, FCC | Tagged | 2 Comments

Why Do Text Messages Cost 20 Cents Each?

Posted on July 16, 2010 by

Unless you sign up for a text messaging package, texts typically cost 20 cents each in the United States.  Text messages cost cell phone companies far less than one cent each to send across the network.   In Europe, unlimited voice, data, and texting cost as little as $30 per month, and you can often use pure Skype on your phone as well.  Yet in the United States, the cost of texting has risen from as little as 3 cents per text in 2003 to a nearly uniform 20 cents per text across the major carriers.  This report indicates that a teenager who thought he had unlimited text messaging was charged over $1,000 per message in a single month back in 2007 by T-Mobile, after he pressed a button that made his phone operate like an instant messaging program and allowed him to crank out huge numbers of texts per day as a result:

In 2009, the European Union imposed a price cap of 13-15 cents per text, even when roaming in another country than the subscriber lives in, after conducting an inquiry into cell phone carrier profit margins on texting.  This followed a very successful effort starting in 2007 to limit data roaming charges, which resulted in more usage and lower bills for roaming within Europe.  ”We want finally to get rid of the punishment on your telephone bill when you are crossing a border,” European telecommunications commissioner Viviane Reding told the BBC.

Here in the US, the Consumers Union and other groups urged Congress to take action on the rising text messaging rates.  Senator Herb Kohl sent a letter to the Justice Department urging an inquiry.  In January 2010, the Justice Department decided not to pursue its investigation into whether cell phone carriers conspired or colluded within a short period of time to increase texting rates.   With nearly 1.5 trillion text messages sent in 2009, a variation of a few cents per text due to coordinated action by carriers could have dramatic consequences for subscribers.

Although the FCC has a mandate to control tariffs and pricing to ensure “reasonable charges,” commentators have argued that it hasn’t done enough in this area.  Consumer class actions have been filed and may have a greater chance of success than FCC filings, but they too face some hurdles in restrictive rules regarding antitrust conspiracies and class actions promulgated by the Roberts Court.

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And It Begins

Posted on July 16, 2010 by

In the 1992 Vice-Presidential debate, Admiral Stockdale famously opened by asking:  “Who am I?  Why am I here?”  That didn’t really work out so well for him, but it seems like a good way to start a blog.  So to rephrase:  Who are we?  Why are we here?

Digital Mercury is a blog devoted to Internet, media, and tech law.  In the months ahead, we’ll be writing about a wide range of communications policy issues including net neutrality, privacy, media consolidation, the First Amendment, copyright, cybersecurity, and several other topics too.  We’re new, and the site remains in work in progress.  So bear with us as we get up and going.

As for the “who,” we’ve added a brief summary of the editors and contributors in the “About Us” section.  You can also simply click on the authors’ names to the left for more information.  And we’ll be adding more authors in the future too.  So welcome!

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