Five Simple Steps To Net Neutrality

Two words such as network neutrality evoke a swath of opinions and they mean different things to different people. “Treat all data equally” is the baseline slogan. None of us really want operators like wireless carriers, cable companies or Internet service provides (ISPs) who control the network to be able to throttle the speed, block certain content or cap data by type and prioritize those services which max their own revenues. We want to protect our open Internet as best as we can. Conversely, looking in the future, nobody wants life-critical data shared with equal priority with, say, entertainment - the idea of wirelessly-delivered collision avoidance data in your car competing with someone’s Netflix movie stream simply isn’t tenable.

How To Treat All Things Equal

There’s no easy way out of this dilemma as it implies bringing in governments, regulators and their bureaucrats. Many view this as a death-knell for any fast-paced technology, citing the unregulated Internet as a prime example of how well things work when regulators and lawyers stay out.
But, to be frank, either you

• ensure a network has unlimited bandwidth

or

• prioritise content by type (text, images, audio, video, and in particular, time-sensitive data controlling critical applications)

Scenario 1 smacks of an infrastructure utopia that defies physics given that wireless access frames our communications future and the spectrum it requires is indeed a limited resource.
Scenario 2 discriminates content by type and thus stokes the fire on net neutrality as we move forward in our commerce and entertainment future that depends on video and high-bandwidth services to satisfy consumers’ appetites.

Net Neutrality Violation In Europe

In a recent survey, market researchers Rewheel compared the pricing of mobile data plans for 4G networks in the 28 member states of the European Union in their Digital Fuel Monitor. The firm meticulously disentangled the different subscriber plans by operator and country and found that some users pay up to 100 times more per Gigabyte of data compared to more fortuitious neighbours located in other European countries.

Net Neutrality? Zero rating accounts for data discrimination on Europe's 4G networks

So much for network neutrality and all the talk about a digital single market! The scroundel wreaking this pricing havoc was identifed as zero rating, a practice in which mobile operators provide subscriber contracts that bundle their preferred services with unlimited usage (from over-the-top - OTT - providers under contract) yet cap the accompanying Internet data plan in the low Gigabyte range. For example, a subscriber is lured to choose an operator offering unlimited (read zero-rated) text/audio/photo/video messaging for an application such as WhatsApp and gets a measly bucket of 1 GByte for general Internet usage bundled in their plan. Substitute WhatsApp for any other messaging, social media, music streaming, file sharing or cloud storage service if you like. Analysis revealed that countries allowing zero rating accordingly have far more costly mobile Internet offerings.

Enter Legislation

With with increasing importance of the communications infrastructure to the economy of countries, it’s hard to imagine that a future Internet as delivered through fixed and mobile networks will work without government intervention. Both Europe and the USA prove this of late. Their stance is vague at best, leaves a lot open for interpretation, and ultimately stalls progress. Two recent cases point to such uncertainty.

The European Union initially included strong safeguards for net neutrality as introduced by the European Parliament (EP) in March 2014. However, the European Council (EC), who shares legislative powers with the EP, significantly diluted these in March 2015. The EC was in favour of net neutrality exemptions in the form of specialised services without exact definition of what these would encompass.

In the USA, pressure from the Obama administration triggered the Federal Communications Commission (FCC) in February 2015 to classify broadband providers as public utilities, or as common carriers. In other words, operators and their networks underly similar principles as apply to roads, railway lines, pipelines and telephone poles. This in turn provides the FCC with the power to determine whether any of an operator’s business practices constitute “unreasonable discrimination” in order to protect the consumer and customer.

Net Neutrality The Easy Way

So how do you keep future network usage cases, technology and legislation on even keel? Here’s the simple armchair view of yours truly:

1. Install a net neutrality body at a some sensible regional level
2. All data travelling over networks and airwaves needs to classified into specific types
3. All providers of content are required to apply for a priority level for each data type they wish to transmit
4. The body determines a priority for each submission and inserts it into a single, ordered list. For example, data encompassing the vital signals of critically ill patients might rank near the top whereas music streams are more likely to be found near the bottom.
5. The body maintains and has the power to enforce this list in their region

It’s as simple as that ! Of course any company offering end-to-end proprietary networks should be exempt of such regulation. Then again it’s hard to imagine how such private, fast communication lanes will ever reach a large number of end users without ever having to traverse “public” sections of the infrastructure.

Now over to any of you who would venture implementing this…

Making a Case for Mobile Operators

Mobility continues to shape and restructure our private and working lives in fascinating and incredible ways. Cellular networks and short-range technologies such as WiFi are its primary enablers. On the cellular front, mobile operators and wireless carriers have shouldered the immense cost of rolling out infrastructure and licensing spectrum. But are they participating in due measure as mobile opportunities expand?

The 2015 publication by The GSM Association (GSMA) called “The Mobile Economy” is a recommended read for anyone with a stake in this industry. The report takes stock of where mobile stood in 2014 and the direction it is taking as we move towards 2020. The real jaw dropper is the $3 trillion contribution from the industry itself towards the estimated $78 trillion worldwide GDP in 2014 (according to the World Bank). That’s almost a 4 % share towards our global GDP.

Operator revenue growth to slide

Looking ahead, the mobile industry is striding forth with confidence at an average annual growth rate of roughly 4 %. That’s good news. Unfortunately not for all. Mobile network operators’ (MNO) year-on-year revenue growth is predicted to fall from around 5 % as measured in 2012 to 2 % as predicted for 2020 by the GSM Association. In other words, MNO revenue growth is eroding. You might contend a slowdown in expansion is better than contraction per se. Answering these two questions might shift your perception however:

1. Who has invested the most to date in the mobile industry?
2. Who has empowered most of us with the anywhere-anytime paradigm over the past two decades?

How to rollout new network infrastructure despite dwindling revenue growth?

Acquiring costly spectrum from governments and rolling out country-wide cellular networks with the latest technology is an expensive business. In 2014 MNO’s spent over $200 billion worldwide (capex) to increase coverage and capacity for us all. Shouldn’t we give credit where credit is due?

The problem with 24-month contracts

Incredible but true: the data explosion on mobile networks fueled by smartphones ought to result in higher per-bit pricing until such time that capacity is in excess, going by the perennial law of supply and demand. One would expect operators to get an ARPU (average revenue per user) boost . Instead, price wars in fierce, competitive environments spur operators on to sell low-cost, tiered plans that offer megabyte/gigabyte buckets of monthly data based on 24 month contracts. It’s difficult to predict the behaviour of customers in terms of their data consumption habits over such a long contract period. One thing is certain though, empowered by ever new mobile devices and applications, their data usage is sure to increase over time. Consistent bandwidth on cellular networks is and will thus remain a sought-after commodity. As a result, MNOs’ are under more pressure than ever to upgrade their infrastructure and find novel approaches to avoid next-gen all-IP networks from being more than just “dumb pipes” that other providers use to rake in profits with higher-margin services.

Change is the only constant

Mobile network operators in developed markets are gearing up to the future and crafting new, sustainable business models by

• merging with other regional operators for network sharing and creating more negotiation clout when purchasing infrastructure through economies of scale
• moving from unlimited data plans to tiered versions and finally to value-based contracts
• making strategic acquisitions or entering partnerships to combine mobile services with fixed-line telephony, Internet access (cable/DSL), and TV in converging quad-play world
• treating data based on traffic type to ensure Quality of Service (QoS) and ultimately customer satisfaction
• working on deals with providers who wish to provide a consistent mobile user experience for their prized services
• slashing handset subsidies
• developing alliances, partnerships, joint ventures with market leaders in promising verticals such as M2M/IoT, Connected Car, Mobile Wallet, video streaming, location-based advertising and app development.

Proponents of the network neutrality who advocate the Internet’s continued success depends on a level playing field for all may not like any of this. Yet acquiring spectrum and rolling out wireless networks doesn’t come on the cheap and business models need to adapt to the changing markets.

Mapping out the future

Next to keeping their networks geared to next-generation technology, operators simultaneously need to identify the most lucrative business cases from the swath of opportunities unfolding. Conferences, forums and trade shows are ideal places to learn from peers in a complementary sector and rub shoulders with technology experts and thought leaders.

Conferences, forums, trade shows and seminars according to mobile/wireless topic over the past 2-years - Source: 2015 wi360 Event Guide

wi360 maintains a free wi360 Event Guide focused exclusively on the mobile and wireless industry which is continuously updated through the year.