FCC moves to kill off all exposure to Huawei in rural networks

FCC Commissioner Geoffrey Starks has stuck the knife into Huawei at an industry conference, suggesting rural telcos will be given financial assistance to cleanse their networks of the vendor.

Speaking at the Competitive Carriers Association annual conference, Starks targeted the Chinese telecommunications industry on the whole, and Huawei in particular. Not only is the FCC exploring ideas on how to ban the purchase of Huawei equipment entirely, but also the introduction of an initiative which would offer federal dollars to search for, and remove, legacy Huawei equipment which might be in the network.

“Huawei is one of the biggest telecom equipment manufacturers in the world, and although its share of the U.S. telecom market is relatively small, some wireless carriers have purchased Huawei equipment for their networks,” Starks said.

“These carriers bought this equipment, often a decade or more ago, because it was far less expensive than other options, and because Huawei was willing to work with them to create customized networks.

“The Commission is currently examining whether to ban the use of federal support dollars for the purchase of such equipment, but we can’t ignore the problem of the equipment that’s already here.”

Starks is the FCC frontman for a new programme which has been known as ‘Find it, Fix it, Fund it’. The initiative will provide funding to telcos to self-assess networks and identify what would be deemed as ‘suspect equipment’. Currently it is voluntarily, though it does appear there are regulatory changes on the horizon to make the initiative a compliance issue.

In the short-term, the equipment might be allowed to stay in the network, though it would be quarantined. Long-term, Starks is suggesting every piece of equipment would have to be ripped and replaced.

The financial support from the FCC is an interesting element, and it does seem to have been working with the private sector to advance its ambitions.

“Nokia and Ericsson have said that they are willing to create products and financing options geared toward smaller carriers that need to replace Chinese equipment,” Starks said. “They also claim that they have had handled similar replacement efforts with minimal customer disruption.”

The challenge which many of these rural telcos are facing. Financially these companies are under strain. Connectivity is an expensive business and the rural players cannot experience the same economy of scale benefits the national players can. Ripping and replacing prior investments would be a kick in the teeth for already financially tense environments.

This is the reason Huawei has been successful in engaging rural and regional connectivity providers in the US. Not only does it offer a broader range of products, some of which are much more financially attractive, but it has been much more open to customisable deployments than rivals. The US is an incredibly varied geography, there is not a one-size-fits-all opportunity here.

A lack of competition and the removal of the cheapest network infrastructure provider is a massive concern for the rural and regional telcos. However, with the help of federal funding and new business offerings from Ericsson and Nokia, the financial burden of rip and replace regulations might be lessened. This does not mean networks will be better or cheaper in the long-term, but it is a nod from the FCC to the immediate concerns.

Aside from this conference speech from Starks, further evidence of Chinese aggression has emerged from the US.

Senators Chuck Schumer and Tom Cotton have called for a ban for China Telecom and China Unicom to use US networks. China Mobile has already been facing difficulties in obtaining a licence to operate in the US, though this further expands the scrutiny which is being placed on Chinese companies.

In a letter to the FCC, Schumer and Cotton have suggested the two telcos, both of which have direct links to the Chinese Government, could use networks to target US communications. They have also suggested the pair could use the licenses and exposure to US networks to reroute traffic through China.

Perhaps this is an incident which many should have expected, but it does demonstrate the US Government is taking a more comprehensive approach to tackling China, bringing more companies into the fray.

Last month, it was suggested the Department of Justice is attempting to put the brakes on a subsea cable which is being funded by Facebook and Google, as well as a Chinese partner. Dr Peng Telecommunication and Media Group does have ownership ties to the Chinese Government, though two US firms could get hit by collateral damage through this DoJ investigation.

All of these incidents indicate the aggression from the US Government is widening and becoming increasingly complex. The likes of ZTE, Alibaba, OnePlus and Xiaomi should perhaps be wondering when they will be dragging into the conflict.

US starts edging towards mid-band spectrum release

The Federal Communications Commission (FCC) has released a statement all the telcos have been waiting for; there is finally going to be a spectrum auction for the 3.5 GHz band.

The telcos will have to wait more than year to access the valuable spectrum assets, though the FCC team will hope to discuss rules and procedures to carve up the much-desired mid-band spectrum next June. The auction will likely be later in the year or early 2021, though it is evidence of the slow-moving wheels of progress.

“Making more spectrum available for the commercial marketplace is a central plank of the Commission’s 5G FAST strategy,” FCC Chairman Ajit Pai said in a blog post.

“We’ve already completed two spectrum auctions this year and will begin a third on December 10. And at our September meeting, we will vote to seek comment on draft procedures for an auction of 70 MHz of spectrum in the 3.5 GHz band to begin on June 25, 2020.”

For the telcos, this will be welcome news. The US has largely focused on high-frequency spectrum bands, the mmWave assets, though commentators have suggested this has not been able to deliver the desired experience for 5G connectivity. High speeds might be achievable, however there is a serious compromise to be made on the coverage maps.

This is where the European telcos are reaping the benefits. Most of the 5G launches have been based on mid-band spectrum, striking what is a much more palatable balance between increased speeds and reasonable coverage. This coverage can later be supplemented by higher frequency connectivity to add additional speeds in the future, though the 100+ Mbps speeds should be more than enough for the moment.

“The 3.5 GHz band is prime spectrum for 5G services,” Pai said. “But when I became Chairman, we didn’t have the right rules in place to encourage the deployment of 5G in the band.

“That’s why I asked Commissioner O’Rielly to lead our effort to adopt targeted updates to the licensing and technical rules for the 3.5 GHz band with the aim of promoting more investment and innovation.”

Alongside frequencies in the 3.5 GHz band, the FCC is also considering new procedures to free-up more spectrum in the 3.7-4.2 GHz frequency range. Currently being used for video, this band will offer much more opportunity than the 70 MHz being released for auction in the 3.5 GHz band.

Although the mmWave frequencies will be critical in delivering the promised speeds for the 5G era, it does look like the US has gone the long-way around delivering the foundations for 5G. European telcos and regulators have generally prioritised mid-band spectrum, allowing for a 5G-ish experience on current network densities, with the long-term ambition of supplementing with higher frequencies.

This approach seems to be a much more reasonable one. It creates a foundation layer, with coverage maps consumers have come to expect, though speeds can grow as adoption increases and applications emerge which require the ridiculous speeds which are being promised.

With these auctions promised by the FCC, the US is heading in the right direction, albeit, quite slowly.

Pai gobbles up Sprint and T-Mobile US merger

After months of headaches and sleepless nights, the tides of favour seem to be turning for Sprint and T-Mobile US as the FCC chief gives his blessing for the union.

254 days into the 180 days the FCC gives itself to approve mergers, FCC Chairman Ajit Pai has officially confirmed his position. It is still not quite 100% guaranteed for the two telcos, however with Pai’s recommendation, the future is looking very rosier.

“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement.

“Moreover, with the conditions included in this draft Order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market.”

Suggesting this was a protracted and painful process might be one of the biggest understatements of the year. However, it might have been necessary considering the significant impact a merger of this scale could potential have on competition, diversification and network deployment across the US.

Above all else, the US is a monstrous market with an incredibly small number of nationwide telcos. This does of course offer economy of scale to improve investment capabilities, though there is a risk of regional monopolies due to the sheer size and geographical variance across the country. Proposed mergers which would take the number of national telcos from four to three has been extinguished in the past, though this one has passed almost every test.

The greenlight from the FCC Chairman is an important step, adding momentum to positive news from the Department of Justice in the last few weeks. At the end of July, the DoJ’s antitrust division gave the thumbs up, assuming Sprint’s prepaid brand Boost is divested, and Pai has made the same demands.

This is one concession which many expected, but we have major issue with. Dish will acquire the Boost brand, allowing it to make use of its horde of valuable spectrum, satisfying the demands, though will this be enough to maintain the current levels of competition, the objective of both the FCC and DoJ? We do not believe so.

Firstly, instead of having four established telcos in the US, consumers will now have to choose from three telcos and a newbie with zero experience of effectively running a mobile business and network. Dish does not have the competence, experience, infrastructure, processes, billing systems or supply chain to run a mobile business, and it will take years to build these elements to the degree expected.

Secondly, Dish is now an MVNO. It will be able to make use of the T-Mobile network, but the FCC and DoJ has replaced a functional MNO with an MVNO and expects no-one to notice the difference. Both of these agencies expect Dish to have its own network up-and-running in a few years, but this is another ridiculous ambition.

As mentioned in the first point, this is a company which is not practiced in the dark arts of mobile. The three remaining traditional players took decades to rollout their own networks, and they are still not genuine nationwide telcos (there are still network gaps across the country). How is Dish expected to create a nationwide, 4G and 5G, network across a country of 9.8 million km2, with an incredibly variety of different urban densities, geographical landscapes and economic societies.

If anyone thinks Dish is going to be a replacement which can maintain the current status quo, they are quite frankly fooling themselves.

What is worth noting is that this is not the end of the road for Sprint and T-Mobile. It might have secured the relevant regulatory approval, but now it will have to combat the various legal challenges.

Led by New York Attorney General Letitia James, a coalition of State Attorney Generals have filed a lawsuit to block the proposed merger. The lawyers are arguing the merger would harm competition, and it should be blocked to maintain the status quo. As it stands, with four separate MNOs challenging each other, prices and mobile experience is improving for the consumer; the lawyers are arguing that the situation is not broken, it is in fact improving, so why should the FCC and DoJ try to fix an imaginary problem?

Although the approval process from the DoJ and FCC might have been considered a significant problem, the telcos will not have to face legal heavyweights from more than a dozen States. Lawyers have a way of being very difficult when they want to be, so there might well be a few more twists and turns in this saga.

Verizon sues City of Rochester over 5G fees

US telco Verizon has filed a lawsuit against the City of Rochester, suggesting a newly created telecommunications code violates federal law and the maximum fees telcos can be charged.

Filed in the District Court for Western New York, Verizon’s lawyers will be attempting to argue that the implementation of the new telecommunications code by the city will prohibit the rollout of 5G technologies in the area. This is of course early days, though it could go some way in creating legal precedent throughout the US.

Using FCC rules which were passed last September, Verizon will argue the newly adopted telecommunications code in the City of Rochester violates the maximum fee of $270 a year which can be charged by the local governments. Although we were unable to figure out how much each site could cost Verizon annually, it does appear to run into the thousands.

“To better serve its customers and the City and to begin to serve new customers and provide new services, Verizon Wireless seeks to extend, densify, and upgrade its wireless network infrastructure, including to install additional Small Wireless Facilities to support the provision of current and next-generation telecommunications services such as 5G and to deploy fiber to connect these facilities,” the filing states.

“To successfully do this, Verizon Wireless requires new approvals from Defendant to access City property.

“As a result of Defendant’s actions, Verizon Wireless has been, and will continue to be, damaged and irreparably harmed absent the relief requested herein. The harm caused by Defendant’s unlawful actions includes, but is not limited to, an effective prohibition on Verizon Wireless’s ability to provide telecommunications services in the affected area of the City.”

Similar to regulatory changes in the UK with the new Electronic Communications Code, the FCC is attempting to protect the interests of the telcos. As real-estate owners know the telcos have no choice but to increase the number of cell sites to provide the promised 5G experience to consumers, they are in a position of power. The new rules from the FCC, and the creation of the $270 annual limit, is supposed to create a responsible transaction which benefits both parties.

However, it does not appear the City of Rochester agrees with the position of the FCC. In creating its own telecommunications code, it does appear higher fees can be charged for cell sites, while some officials state they are attempting to reduce potential clutter and eyesores created by the additional mobile infrastructure.

Looking at the timeline, Verizon wrote to city officials to ask for revisions to the code on January 10 and February 7, before the code was enacted on February 20 without any amendments, taking effect on April 1. Another letter was sent on April 15 questioning whether the code was compliant with federal law, with city officials finally responding on April 30 suggesting they were happy with the set-up. On July 30, the city officials demanded payment from the telco.

In short, Verizon is claiming the fees are acting as a prohibitor to the delivery of connectivity in the city, therefore federal law is being violated.

What is worth noting, that due to the focus on mmWave for the delivery of 5G services in the US, more cell sites will have to be deployed. This is unavoidable, as to deliver the higher speed promised by 5G, higher-frequency airwaves will have to be utilised. This does not appear to be a problem, however coverage distance will have to be sacrificed leading to the densification plans set-forward by the telcos.

Although this is the first lawsuit of this nature which has been brought to our attention, we suspect there are numerous other local governments attempting to sweat public assets to secure more funding. This is one of the first, but this might become quite a common lawsuit to read about over the coming months and years, as densification strategies gather momentum.

Appeals court halts FCC red-tape cutting quest

The US Court of Appeals for the District of Columbia Circuit has put the brakes on FCC attempts to reduce bureaucracy surrounding small cell deployment in the US.

In March last year, the FCC introduced new rules which would remove certain approvals required for the deployment of small cells. In short, telcos would no-longer have to seek review from the National Historic Preservation Act (NHPA) and National Environmental Policy Act (NEPA) prior to deployment.

In response to the new rules, the United Keetoowah Band of Cherokee Indians in Oklahoma, the Blackfeet Tribe, and the Natural Resources Defense Council (NRDC) objected, suggesting the FCC should not be allowed to remove the approvals with such ease and with a lack of consultation.

In this case, the US Court of Appeals for the District of Columbia Circuit has agreed. Certain aspects of the order have been upheld, however, the removal of this red-tape has been condemned by the Federal Judges.

“We grant in part the petitions for review because the Order does not justify the Commission’s determination that it was not in the public interest to require review of small cell deployments,” the courts opinion states.

“In particular, the Commission failed to justify its confidence that small cell deployments pose little to no cognizable religious, cultural, or environmental risk, particularly given the vast number of proposed deployments and the reality that the Order will principally affect small cells that require new construction.”

For the FCC, this is a loss, despite a positive statement from Commissioner Brenden Carr.

“I am pleased that the court upheld key provisions of last March’s infrastructure decision,” said Carr. “Most importantly, the court affirmed our decision that parties cannot demand upfront fees before reviewing any cell sites, large or small.

“We are reviewing the portion of last March’s decision that the DC Circuit did not affirm and look forward to next steps, as appropriate.”

This might sound positive but let’s not forget the objective of the FCC in introducing these new rules; speed-up deployment of 4G and 5G infrastructure in regions which might fall into the digital divide.

As we move forward into the 5G era, new opportunities are going to emerge for all economies around the world. The financial benefits are constantly being thrust into our face by telco lobbyists, however for these economic surges to be realised the right infrastructure needs to be in place.

This is where the FCC plays the most significant role. Pai has taken a machete to red-tape in recent years to offer more freedoms to the telco and media industry on the whole, and this was another step in that direction. Removing certain tick boxes would help the telcos roll-out new networks faster, though it seems it has over-stepped its mark in this instance.

FCC allocates $20bn to close US digital divide

One of the genuine risks of the accelerated journey towards the digital economy is the widening digital divide, though an extra $20 billion from the FCC could help even the landscape.

Although the US is one of the most advanced digital nations in the world, the difference between the haves and have nots is quite staggering. If you were to compare the connectivity options for a millennial in San Diego to a farmer in rural Ohio, you wouldn’t assume it was the same country. Some might see it as a first world problem, however with the benefits of connectivity being applied to areas such as education and healthcare, it is irresponsible to allow this divide to continue.

This is the conundrum which the FCC has faced in recent years. It is of course commercially attractive to drive connectivity options in the densely populated urban areas, but such are the sparse and environmentally challenging regions across some of the US, vast numbers of people are being left behind.

Here, the FCC is proposing the establishment of the Rural Digital Opportunity Fund, which will direct $20.4 billion towards closing the digital divide.

“In short, we’re proposing to connect more Americans to faster broadband networks than any other universal service program has done,” said FCC Chairman Ajit Pai.

“I’m excited about what this initiative will mean for rural Americans who need broadband to start a business, educate a child, grow crops, raise livestock, get access to telehealth, and do all the other things that the online world allows. And I look forward to kicking off this new auction next year.”

This fund will have a broader scope than the previous Connect America Fund (CAF), and will aim to assist regions which are not currently able to access download speeds of 25 Mbps and upload speeds of 3 Mbps, significantly higher than the caps placed on the CAF funds.

The funding will be allocated in two phases. Firstly, using data which has already been collected by the FCC, a reverse auction will be implemented to hand out the funds. Alongside this auction, a new data collection tool will be implemented to offer greater depth to the insight. In the second phase, the intelligence gathered through this tool will help allocate funds as well as to those communities which missed out in the first phase.

With what will be known as the Digital Opportunity Data Collection initiative, the FCC will aim develop more granular broadband deployment data. This initiative will aim to collect geospatial broadband coverage maps from fixed broadband ISPs, and also develop crowd-sourcing portal that will gather input from consumers as well as from state, local, and Tribal governments. Through crowd-sourcing the data, the FCC will hope to validate the information put forwards by the ISPs.

This is a sensible approach from the FCC, as while the ISPs will have the biggest treasure troves when it comes to data, they have also shown themselves to be misleading in the past. With such a tool at its disposal, the FCC can become a more intelligent organization, taking proactive steps towards fixing the digital divide as opposed to simply signing blank cheques for the telcos to cash.

“I appreciate the hard work that went into this item to fix the Commission’s broken mapping process,” said FCC Commissioner Michael O’Reilly.

“Like some of the very laudable mapping bills being considered by Congress, including those by Chairman Wicker and Senator Capito, this item takes important steps in creating a more accurate and useful picture of broadband coverage, which should allow the Commission’s universal service policies to better focus on those millions of Americans left behind without access to broadband service today.”

And while this might sound like a positive step-forward, Commissioner Jessica Rosenworcel, a political opponent of Pai and O’Reilly, has found something to be irked about. Rosenworcel fears the maps might be replaced by a difficult to find URL and handing control of data collection to the administrator of the funds is not the best way forward.

Although we should not be surprised by the objections, they are incredibly weak. Rosenworcel has said she likes the idea, though her objections are seemingly just trying to be awkward, playing the childish role of political opponent wherever possible. While we rarely have anything positive to say about Pai and his cronies in the FCC, this is a sensible move forward and Rosenworcel seems to be finding objections purely because it adds to the theatrics of politics.

What is incredibly difficult to understand is how severe the digital divide actually is in the US. The FCC suggests there are 21 million US citizens who cannot access acceptable broadband speeds, though Rosenworcel has quoted a report which claims the digital divide is as high as 162 million.

This outlandish claim pays homage to a report from Microsoft which should be taken with a bucketful of salt. Let’s not forget, Microsoft is a firm which will benefit from stoking the fire and attracting additional funds to fuel connectivity deployments in the rural community.

This in itself is one of the significant problems when attempting to tackle the digital divide; no-one actually knows what the starting point is. Depending on your commercial aims and political allegiance, the number of underserved citizens will vary wildly. How can one address a problem when the variables remain unknown? It is nothing more than shooting in the dark, hitting the mark occasionally but likely to miss the most important targets.

Alongside these changes in funding connectivity, the FCC has also released a statement which will address how funding for telehealth services is allocated.

This is where the idea of connectivity can be more than simply a means to access entertainment, taking the digital divide beyond the realms of first world problem. There are communities in the US who are underserved by medical services thanks to doctor shortages and hospital closures. The Rural Health Care Programme aims to address these challenges, making use of connectivity to ensure all US citizens have access to medical services as and when they need them.

The latest proposal is another reform to how funds are allocated, attempting to identify the regions which are most severely underserved. Funding will be increased by 43% to $571 million.

US refarms 2.5 GHz band from education to 5G

The US telecoms regulator has decided to redirect the 2.5 GHz band away from its current educational use to create more 5G spectrum.

The Federal Communications Commission is positioning this as a move to modernize the outdated regulatory framework for the 2.5 GHz band, which is apparently the single largest band of contiguous spectrum below 3 GHz. The band had been set aside for educational TV use and the FCC move removes any restrictions on who can use it and how. It had previously been made available for free but now the government gets to cash in on yet another auction.

At long last, we remove the burdensome restrictions on this band, allowing incumbents greater flexibility in their use of the spectrum, and introduce a spectrum auction that will ensure that this public resource is finally devoted to its highest-valued use,” said FCC Chairman Ajit Pai. “These groundbreaking reforms will result in more efficient and effective use of these airwaves and represent the latest step in advancing U.S. leadership in 5G.”

According to Pai, most educational users of this spectrum ended up leasing it out for commercial use anyway, which he seems to consider justification enough alone to take it off them. His full statement makes several oblique references to dissent among the FCC commissioners. The motion was opposed by two Commissioners and Pai infers that their obstruction could result in the US falling behind in the 5G race.

One of those dissenters was Jessica Rosenworcel, who often disagrees with Pai. Here’s her tweet on the matter.

“This order turns its back on the schools and educational institutions that have made the 2.5 GHz band their home since 1962,” said Rosenworcel in her statement.  “Today the FCC takes the innovative effort to infuse this band with learning opportunities—an initiative that dates back to the Kennedy Administration—and reverts to uninspired and stale commercial spectrum policy.

“This is a shame. Instead of using these airwaves in creative ways, we take the 2.5 GHz band, cut education from its mission and collapse this spectrum into an overlay auction system that structurally advantages a single nationwide carrier.” She then went on at considerable length about how important education is.

Commissioner Starks was the other dissenter and wrote an essay on the importance of the education sector having access to this spectrum that it made Rosenworcel’s efforts look like a memo. With boring inevitability the two dissenters are both affiliated to the republican party and the three in favour are all republicans, which makes you wonder whether there is any principle involved at all.

As Light Reading informs us, this spectrum is likely to be used largely for rural coverage and especially for fixed wireless access. The US is a big country and there are still plenty of coverage gaps to fill. The education sector is apparently bemoaning the decision but if it has been largely reselling the spectrum maybe it’s the revenue that it will miss the most.

Amazon takes one small step for satellite connectivity

Amazon has submitted its application to the FCC to deliver home broadband services to rural communities in the US through its Kuiper Systems satellite programme.

In a filing with the FCC, Kuiper Systems, a wholly-owned subsidiary of Amazon.com, plans to deliver high-speed, low-latency broadband services to consumers, businesses, and other customers worldwide through a constellation of 3,236 satellites in 98 orbital planes at altitudes of 590 km, 610 km, and 630 km, us Ka-band radio frequencies.

Aside from providing broadband solutions to rural and hard-to-reach communities, the plan is also to enable MNOs to expand wireless services to unserved and underserved mobile customers and provide high-throughput mobile broadband connectivity services for aircraft, maritime vessels, and land vehicles.

While Amazon has plugged its bank account to entice the FCC, it is also leaning on its existing operations as a means to support the new venture. It has stated it has the ‘global terrestrial networking and compute infrastructure required for the Kuiper System’, as well as the ‘customer operations capabilities’ acquired through its various businesses from eCommerce through to AWS cloud computing.

It’s a comprehensive filing from Amazon, and we suspect it peak some interest at the offices of the FCC.

“The Kuiper System will deliver satellite broadband communications services to tens of millions of unserved and underserved consumers and businesses in the United States and around the globe,” the application states.

“According to the FCC’s 2019 Broadband Deployment Report, 21.3 million Americans lack access to fixed terrestrial broadband with benchmark download and upload speeds of 25 Mbps/3 Mbps, and more than 33 million Americans do not have access to mobile LTE broadband speeds of 10 Mbps/3 Mbps. Amazon will help close this digital divide by offering fixed broadband communications services to rural and hard-to-reach areas.”

Once the ugly duckling of the communications family, the satellite segment has been given a new lease of life in recent months. Amazon and Tesla are two companies which are attracting the lion’s share of headlines, but there are several firms, such as OneWeb, Telesat and LeoSat Technologies, with grand plans to launch constellations over the next few years to bridge the connectivity gap.

And it isn’t just satellites which might be filling the skies over the next few years. Google’s Loon is another business attempting to break the mould when it comes to connectivity. Last week, Google finally received the relevant permissions to start testing its balloons to deliver connectivity, with commercial services set to launch over the coming months.

Even internally the telco industry is seeking to disrupt the status quo. Fixed wireless access for broadband solutions are becoming increasingly popular as a means to deliver connectivity over ‘the last mile’. AT&T and Verizon are charging ahead in the US, with companies like Starry challenging, while numerous telcos have announced their own ambitions in Europe, including Vodafone and Three in the UK.

Although there are still ambitions to deliver the full-fibre dream, the commercial realities seem to be getting in the way. It is incredibly expensive to deliver home broadband through wires, especially when you go to regions such as the US, where the geography is so diverse and vast, or Africa, where ARPU remains a problem in justifying ROI. The digital divide is present everywhere, to varying extremes, and it seems the traditional approach to home broadband is not going to be able to meet demands.

That said, some territories are even out of the reach of Bezos. In the application, Amazon has requested a waiver from delivering connectivity to Alaska, as it would be too far north for the constellation. It perhaps undermines the validation Amazon has put forward, delivering connectivity where it is too difficult for others, though whether this has any material impact remains to be seen.

Although progress is clearly being made here, what is absent from the application are any details on the design of the satellites or timetables for launches. Should permission be granted, we suspect Amazon would move forward very quickly however, Bezos is a space-buff after all.

Interestingly enough, Bezos’ side venture Blue Origin could be in the running to launch the satellites, though Amazon would have to be very careful here. As a publicly-traded company, this could be viewed as a conflict of interest.

The OTTs have constantly been a threat to the delivery of connectivity, a segment owned by the telcos to date, and have faced numerous complications is staging a coup (see Google Fiber). Using satellites might just be a way to carve a niche. It will be an expensive job, but these are companies which have the funds, the desire and the culture to make such a dream a reality.

OTTs Telcos
Cash Cash rich organizations, with incredibly profitable core business models to fuel expansion Incredibly constrained thanks to disruptions to profit-machines such as voice and SMS. Already committed to expensive business of traditional connectivity leaving limited funds for cash-intensive R&D outside bread and butter operations
Desire Constantly searching for new ideas to fuel growth on the spreadsheets. Expectations are high with shareholders and core models will slow down at some point. Do not have the same limitations placed on them (legacy business models and technologies) as the telcos Seem to be fighting too many short-term fires to cast an eye on the horizon. 5G and fibre are taking up so much attention, there seems to be little desire to disrupt themselves. Focusing on protecting what they have
Culture Cultivated a culture of exploration and fail-fast. Willing to fuel ideas without immediate commercial gains if there is potential for profits. More of a big-picture mentality to business Traditional businesses, with traditional leadership and traditional employees. Rarely search beyond the norm for profitability

T-Mobile/Sprint merger might be heading towards a ‘no’ – report

The merger approval process is heading towards the business-end of proceedings, and the omens are not looking particularly healthy for T-Mobile US and Sprint.

The longer the process takes to complete, the more of a feeling there is the transaction might be denied. As it stands, the FCC has seemingly lit the green light, though it does not appear the Department of Justice (DoJ) is on the same page.

According to reports from Bloomberg, the DoJ is considering additional concessions which would force T-Mobile US and Sprint to create a fourth national MNO to preserve competition. How this would be achieved is not detailed, but it is difficult to see how the duo would be happy with this outcome.

If reports turn out to be true, the concessions bar might be set too high for the parties to be comfortable. This is of course assuming the DoJ is happy with the plans laid out by T-Mobile US and Sprint to satisfy the alleged concession.

The long-standing justification for this merger is to create a more competitive alternative to AT&T and Verizon. To do this, T-Mobile US and Sprint executives have argued combining the network and spectrum assets is imperative. This is where the details of how a fourth nationwide player are needed.

A fair assumption would be the DoJ would insist T-Mobile US and Sprint would spin-off some of their assets to create this fourth alternative. Considering the vast investment which would have to be made, both monetary and time, to establish another MNO from the ground up, it is realistically the only option.

However, spinning-off network and spectrum assets to create a fourth nationwide MNO would most likely weaken the position of the newly combined business. Surely this would undermine the initial justification for the merger? If the merged business does not have access to all the current assets of the pair, would it still be in the same league as AT&T and Verizon?

Critics of the deal are already suspicious of the claims the merged business would be able to satisfy the coverage obligations of the FCC, 97% 5G coverage within three years with no price increases, and what would they say if the DoJ forces the pair to release assets?

These reports also compound theories about the different approaches from the FCC and the DoJ. It would appear the two approving agencies are offering different opinions on a merger for the first time. This can perhaps be explained by the objectives of the agencies.

For the FCC, it does appear improving mobile coverage and quality of experience is the main objective, while the DoJ is focused on preserving competition and choice for the consumer. While there might be some common ground between the two objectives, there is also room for opposing opinions.

For T-Mobile US and Sprint, the situation is not looking the healthiest. Accepting these reported concessions might be difficult if the pair are to remain true to their stated objectives, and that is of course assuming the DoJ accept the response on how they will meet the obligations.

It’s all starting to look a little messy for T-Mobile US and Sprint, and we are starting to get stronger feelings no will be the answer at the end of this prolonged saga.

Qualcomm’s share price nosedives after FTC antirust loss

Qualcomm might have some of the most battle-hardened legal experts in the technology world, but it can’t win every fight.

In a ruling coming out of the District Court for the Northern District of California, Judge Lucy Koh has ruled the chipset giant had violated the Federal Trade Commission Act. The judgment could have a significant impact on the Qualcomm business model, with Judge Koh suggesting it used its dominant position to impose excessive licensing fees.

While this certainly won’t be the end of Qualcomm dominance in the chipset market, the firm houses too much competence and smarts, it might have a drastic impact on the spreadsheets. And investors seem to be fearing the worst also, with Qualcomm’s share price declining almost 12% in pre-market trading at the time of writing.

“Qualcomm’s licensing practices have strangled competition in the CDMA and the premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process,” Judge Koh said in the ruling.

In a filing made in 2017, the Federal Trade Commission argued Qualcomm was employing anticompetitive tactics, using its dominant position in certain segments of the semiconductor market to hamper competition and effectively hold customers to random. The FTC suggested some components licenced by Qualcomm were standard essential parts, meaning they would have to be licenced on ‘fair, reasonable and non-discriminatory terms’. In short, Qualcomm should not have been charging such a handsome premium on the licences.

The FTC also claimed it was not reasonable for Qualcomm to enter into an exclusive agreement for some components with Apple, shutting other smartphone manufacturers out of the equation.

The Qualcomm business model has been under fire for some time, with the business facing numerous legal challenges in different markets worldwide. Although this is only a single ruling, it remains to be seen whether this sets a precedent and a subsequent domino effect around the world. Qualcomm is on the ropes here, though it will be interesting to see how the firm reacts to this latest antitrust blow.