Nokia admits there may still be some Alcatel Lucent skeletons in the closet

Finnish kit vendor Nokia has filed its annual report with the SEC and in it flagged up some legacy issues from Alcatel Lucent that may still be a problem.

In the lengthy ‘risk factors’ section, Nokia indicates that, even years after it completed the acquisition of Alcatel Lucent, it’s still digging up stuff that may present some kind of threat to the company. Here’s the relevant passage in full.

“During the course of the ongoing integration process, we have been made aware of certain practices relating to compliance issues at the former Alcatel Lucent business that have raised concerns. We have initiated an internal investigation and voluntarily reported the matter to the relevant regulatory authorities, with whom we are cooperating with a view to resolving the matter. The resolution of this matter could result in potential criminal or civil penalties, including the possibility of monetary fines, which could have a material adverse effect on our business, brand, reputation or financial position.”

Asked for further comment on the matter Nokia just stressed that “although this investigation is in a relatively early stage, out of an abundance of caution and in the spirit of transparency, Nokia has contacted the relevant regulatory authorities regarding this review.” There’s no reason not to take that statement at face value at this stage, but while the extent of the material effect this could have on Nokia remains uncapped it will surely remain a significant concern.

Iran is also addressed in the risks section, with Nokia noting the dilemma that, while Europe is relaxing its sanctions against the country, the US is moving in the other direction and ramping them up. “As a European company it will be quite challenging to reconcile the opposing foreign policy regimes of the US and the EU,” it laments.

Since the US has shown an unlimited capacity for vindictiveness towards companies that do business with Iran Nokia has sensible decided not to do any more business there for the time being. “Although we evaluate our business activities on an ongoing basis, we currently do not intend to accept any new business in Iran in 2019 and intend to only complete existing contractual obligations in Iran in compliance with applicable economic sanctions and other trade-related laws,” said the filing.

Lastly the risks section also mentions HMD Global, which licenses the Nokia brand to put on its smartphones. It doesn’t make reference to any specific case but notes “Nokia has limitations in its ability to influence HMD Global in its business and other operations, exposing us to potential adverse effects from the use of the Nokia brand by HMD Global or other adverse development encountered by HMD Global that become attributable to Nokia through association and HMD Global being a licensee of the Nokia brand.” How timely.

Silicon Valley doesn’t know where to look in the 2020 Presidential race

Traditionally Silicon Valley has supported Democrat Presidential candidates but, with the resident internet giants increasingly becoming a political punching bag, this might change very quickly.

More specifically, Silicon Valley tends to lean towards ‘progressive’ Democrats. Many of those who would want to be included in this list have been running events in California recently to woo voters and potential donors alike, but these are candidates which have not been friendly to the internet giants in recent months.

Some of those who would call themselves ‘progressive’ Democrats include California Senator Kamala Harris, Massachusetts Senator Elizabeth Warren and New Jersey Senator Corey Booker, all of which have made moves against the technology giants for varying reasons. Harris and Booker have sponsored or supported bills which would place greater scrutiny on acquisitions, while Warren made the outlandish promise to break-up big tech and reverse certain acquisitions.

While Warren’s promise might end up meaning very little, we suspect there is too much of a focus on popularity instead of practicality, she has been the focal point of some criticism. Texas Representative Beto O’Rourke, another confirmed candidate, poked fun at Warren’s approach instead suggesting the digital economy should be more tightly regulated, avoiding the difficulties of breaking up incredibly complex, private organizations.

The prospect of new regulations is certainly a better option for the internet giants than Warren’s alternative, however O’Rourke is a bit of a difficult horse to back right now. Looking at O’Rourke’s website, it offers little (in fact, zero) insight into potential policies, but if you want to buy a t-shirt this is the place to go.

Of course, regulatory reform is top of the agenda for many of the potential candidates, and the technology industry is a hot topic here as well. Let’s start with the positives.

The majority of the candidates on show were supporters of net neutrality, battling against FCC Chairman Ajit Pai’s mission to undo the protections. Of the potential candidates, Washington Governor Jay Inslee might steal the crown here.

California might have grabbed the headlines for introducing localised net neutrality rules, potentially paving the path for a constitutional crisis, however it was Inslee who was the first to put pen to paper. Washington’s localised net neutrality rules were introduced in March 2018, six months ahead of California.

More positive news focuses on the Lifeline Program, an initiative which helps poorer families access broadband options. This is another area which felt the fury of Pai’s administration, though several of the candidates opposed the cutting of funds. Warren, Vermont Senator Bernie Sanders and New York Senator Kirsten Gillibrand are three candidates which would support the Lifeline Program.

Former Maryland Congressman John Delaney is another who would want to shake the infrastructure game up. Sticking with the rural digital divide, Delaney is proposing the formation of an Infrastructure Bank, with funds of $50 billion, to help close the virtual chasm. This might sound attractive, but Delaney shares the same anti-China rhetoric as President Donald Trump. And that has been working out really well.

Should one of these individuals win the keys to the White House, the FCC could be in-line for yet another shake-up.

Now onto the negative side of regulatory reform. The privacy and data-handling activities of the internet giants have come under a lot of scrutiny and criticism over the last few months. This is unlucky to change, and perhaps will become a lot more aggressive as politicians search for PR points. This is a popularity contest after all.

Almost every candidate is calling for more regulatory reform, pulling down the curtain which hides the data machine fuelling the sharing economy. No-one who is involved in the data sharing economy, internet giants and telcos alike, want too many of these practises exposed as it would lead to public backlash. The industry has allowed the education of the general public to fall too far behind technological developments; any bold revelations will be scary.

Two candidates are setting themselves out from the pack with bold regulatory change, Minnesota Senator Amy Klobuchar and tech entrepreneur Andrew Yang.

Klobuchar’s idea is to introduce a digital dividend on participants of the sharing economy. A levy would be placed on any company which transfers personal data to a third-party, penalising those who monetize data. Those who collect data and use it internally, current or new product development for example, would not be included in the tax.

Yang on the other hand is perhaps proposing the most revolutionary idea; Universal Basic Income (UBI). Effectively, every person over the age of 18 in the US would be entitled to apply to receive $1,000 per month. Yang claims one in three jobs is under risk from automation and AI, therefore the money will help people compensate for this.

The UBI would be funded by consolidating all welfare payments for efficiencies, a new value added tax (VAT), new revenues through increased consumer disposable income and improvements to other areas such as healthcare. However, we suspect this would not cover the outgoings, so it would not be unfair to assume a tax would be placed on those companies benefiting from automation.

Another development mid-way through last year was an attack on the state sales tax regime which the eCommerce giants have enjoyed for so long. These rules would effectively end tax avoidance benefits so many national players have enjoyed by locating head quarters in states like Delaware. Gillibrand, Sanders, Warren and Klobuchar were Senators to voted in favour of the state led digital sales tax.

What is worth noting is policies are still in their early days, and the genuine lobbying from industry will not have started yet. Who knows what the headline policies will be in the run-up to the 2020 Presidential Election, but the Democrats aren’t looking as Silicon Valley friendly as previous years.

BT pleads for open access to street furniture

BT is attempting to rally the industry in an attempt to convince local authorities to ditch the current exclusive concessions model in UK cities in favour of an ‘Open Access Model’.

As it stands, many local authorities operate a concessions model which grant a single player exclusive access to council-owned street furniture, such as lamp posts, to place mobile network equipment. This might seem attractive to the councils from a revenue perspective, but BT is arguing this will be to the detriment of the digital economy in the long-run.

“While the concessions model made sense in the early 2010’s when it first came into common use, the market and regulatory landscape have changed, and it’s become clear that exclusivity agreements act as a barrier to further 4G and 5G investments,” said Paul Ceely, Director of Network Strategy for BT.

“Government initiatives such as the DCMS Barrier Busting taskforce are showing the way, but we believe that industry needs to act. We are leading the way by handing back exclusivity in nine key areas.”

BT currently operates nine exclusive concessions (Glasgow, Cardiff, Brighton, Plymouth, Carlisle, Newcastle/Gateshead, Nottingham, Gloucester and Leicester) and is proposing to end these contracts should the result be an open access environment. The new model would grant all mobile operators and infrastructure companies access to street furniture, paying the local authorities a flat, consistent rate.

Although it is not a new gripe, the bureaucratic and regulatory environment across the UK has once again been blamed for connectivity problems. Almost all the operators have had a moan at the red-tape wrapped regulatory landscape at one point or another, but an open access model would appear to be a sensible step forward to encourage improved mobile coverage and experience.

However, what should be worth noting is there are authorities who have made progress in this area without prompts from industry.

“One of the reasons why the West Midlands was chosen as the location for the UK’s first region-wide 5G test bed was our commitment as a region to do what it takes to work with operators to get the 5G networks we need built in the fastest, fairest and most cost effective way,” said Henry Kippin, Director of Public Service Reform at the West Midlands Combined Authority.

“The timing and spirit of this Open Access initiative is ideal as we will make faster progress through operators and public services working together to a shared agenda so that 5G can fulfil its full potential in driving economic growth that can benefit all our diverse communities.”

While some small-minded public servants might point to the lost revenue when ending the exclusive concessions, you have to look at the long-term benefits. The West Midlands is now home to numerous 5G test beds, R&D facilities and is home to hubs of excellence for emerging technologies.

Whether the local authorities pay attention to logic is an entirely different matter, but any suggestions to decrease the red-tape complications of UK bureaucracy should be welcomed by all.

Europe fines Google another €1.5 billion after belated Android concession

US search giant Google has received yet another fine from the European Commission, this time for abusing its dominant position in online advertising.

Specifically this ruling refers to ads served against Google search results embedded in third party websites. The EC doesn’t like the way Google used to go about this and, having reviewed loads of historical contracts between Google and these other websites, found the following:

  • Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.
  • As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google’s adverts and request a minimum number of Google adverts. As a result, Google’s competitors were prevented from placing their search adverts in the most visible and clicked on parts of the websites’ search results pages.
  • As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.

EC google ad graphic

Taken at face value this would appear to be a clear abuse of Google’s dominant position and it seems to have got off pretty lightly, since it got a much bigger fine for abusing Android’s dominant position last year, on which more below. The EC has been pretty consistent in its position on dominant US tech players deliberately seeking to restrict competition, just ask Microsoft and Intel, so none of this can have come as a surprise to Google.

“Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts,” said Commissioner in charge of competition policy Margrethe Vestager. “Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate – and consumers the benefits of competition.”

As the quote indicates, Google isn’t doing this anymore, but only packed it in once the EC flagged it up in 2016, so that’s still a decade of naughtiness. For some reason Google also chose today to show some belated contrition for one of the things it got fined for last year: forcing Android OEMs to preinstall Google Search and the Chrome browser.

In a blog post amusingly entitled Supporting choice and competition in Europe, Google SVP of Global Affairs Kent Walker started by stressing there’s nothing he loves more than healthy, thriving markets. Having said that he went on to make it clear that its most recent move to improve competition was taken solely to get the EC off its back.

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search,” wrote Walker. “In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app.

“Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones. This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

How touching. Presumably today was some kind of deadline for Google to comply or else. The matter of browser choice is highly reminiscent of Europe’s case against Microsoft for bundling Internet Explorer with Windows. The prime beneficiary of that was, you guessed it, Google, which now accounts for around two thirds of European desktop browser share (see chart), achieved through merit rather than cheating. How sad then, so see history repeating itself on mobile.

So that takes the total amount Europe has fined Google to €8.25 billion. In response to a question after her announcement (below) Vestager revealed the EC has some kind of fine ceiling of 10% of annual revenues so, since Google brought in around €120 billion last year that still leaves plenty of room for further fines if Google keeps getting funny ideas. Incidentally she also revealed that the fines get distributed to member countries, not trousered by the EC itself, which is reassuring.

Source: StatCounter Global Stats – Browser Market Share

Europe cools internet monopoly rhetoric

Almost every politician around the world is currently using Silicon Valley as a metaphoric punching bag, but the European Commission will not be drawn into the monopolies debate.

While 2020 Presidential hopeful Elizabeth Warren has painted a target on the backs on the internet giants, Europe has once again proven it will not be drawn into making such short-sighted and shallow promises. Warren is effectively warming up for the world’s biggest popularity contest, and perhaps hasn’t considered the long-term realities of the dismantling of companies such as Facebook and Google.

Speaking at the South by Southwest festival in Austin (thank you Recode for the transcript), Margrethe Vestager, the European Commissioner for Competition, made a very reasonable and measured statement.

“We’re dealing with private property, businesses that are built and invested in and become successful because of their innovation,” said Vestager.

“So, to break up a company, to break up private property, would be very far-reaching. And you would need to have a very strong case that it would produce better results for consumers in the marketplace than what you could do with sort of more mainstream tools.”

Vestager’s point is simple. Don’t punish a company because of its success. Don’t make rash decisions unless there is evidence the outcome will be better than the status quo. While the fence is proving to be very comfortable, it is a logical place to sit now.

Following up with the European Commission press team, Telecoms.com was told the Commission does not have an official position when it comes to breaking up the internet monopolies. Vestager’s comments are representative of the Commission, and it will evaluate each case on its own merit. Effectively, the breaking up the monopolies is a last resort, and will only be done so in extreme circumstances.

This position is supported by a recent report, put together for HM Treasury in the UK by former Chief Economist to President Obama, Professor Jason Furman. Furman suggests new rules and departments need to be created for digital society, but monopolies, when regulated and governed appropriately, can be good for the progression of products, services and the economy overall.

This will of course be an unpopular opinion, but it makes sense. Sometimes there simply isn’t the wealth to share around. Monopolies are perhaps needed to create efficiencies and economies of scale to ensure progress is made at a suitable pace. However, the right regulatory framework needs to be in place to ensure this dominant position is not abused. A catch-all position should not be welcomed.

This is where the European Commission has been playing a notable role. Numerous times over the last few years, technology giants have been punished for creating and abusing dominant market positions, take Google as an example with Android antitrust violations last June, though it has not gone as far as breaking up these empires. The key here is creating a framework which encourages growth across the board but does not punish success.

Some would argue success in the pursuit of this delicately balanced equation has been incredibly varied, but this should not form the foundation of rash decisions and potential irreversible actions. Big is not necessarily bad.

This is the marquee promise of Senator Elizabeth Warren. In attempting to woo the green-eyed contradictory wannabee capitalists of Middle America, the Presidential contender has promised to split up the internet giants. The complexities and realities of this promise do not seem to have been thoroughly thought out, and it does seem to be a shallow attempt to lure the favour of those who seek fortunes but are unable to congratulate those who have found them.

That said, there are Presidential candidates who are suggesting good ideas. Senator Amy Klobuchar has suggested companies who monetize data through relationships with third-parties should be taxed. This is somewhat of a radical idea, but we do quite like the sound of it.

Firstly, for those companies who say they are collecting data to ‘improve customer experience’, there would be no impact. If the data is being used to enhance current or create new services, and therefore kept in-house, then fair enough. However, if the company is moving data around the digital ecosystem, monetizing personal information, why not place a levy on this type of activity. It might just encourage these companies to be more responsible when more scrutiny is being placed on these transactions.

This is the challenge we are all facing nowadays; the digital economy is a different beast and needs to be tamed using different techniques, regulations and practices. We all know this, but we haven’t actually figured out how to do it.

This is why we kind of like the non-committal, hands-off approach from the European Commission. For an organization which usually likes to run wild with the red-tape, this seems to be a much more sensible approach. Over regulating nowadays could create a patch-work from hell which would only have to be undone. It might seem like a cop-out, but governments should let business be business, while casting a watchful eye over developments.

When no-one really knows how the future is going to evolve, regulation is needed to hold companies accountable and protections are needed to safeguard the consumer. But rash decisions and ridiculous promises are the last thing anyone wants.

América Móvil strengthens its position in Brazil with Nextel acquisition

The Latin American mobile heavyweight América Móvil has agreed to acquire its competitor Nextel in the Brazilian market for $905 million.

Shortly after the deal was announced by América Móvil on Monday, and the board of NII Holdings, which owns 70% of Nextel, announced that it would propose to the shareholders to accept the offer. The other 30% of Nextel is owned by AI Brazil Holdings, the local operation of Access Industries, an American private company whose portfolio includes natural resources, telecoms, internet services, as well as Warner Music, among other media interests.

The nature of the deal, “cash free / debt free”, will let NII and AI Brazil keep all the cash while América Móvil will not assume Nextel’s debts. Although the total transaction value is less than 1.5 times of Nextel’s annual revenues in 2018 ($621 million), it represents almost four times NII’s market capitalisation on its latest trading day on NASDAQ ($229 million), indicating the buyer’s relatively strong confidence in the business prospect.

Brazil is a highly competitive market. According to research by Ovum, by Q4 2018, Vivo (owned by Telefónica) led with one third of the total mobile market, while TIM and Claro (América Móvil’s existing operation in Brazil) were vying for the second place, each serving about a quarter of the total mobile subscribers. Nextel had slightly over 1% market share. The rest of the market is served by Oi (a JV between Altice Portugal, formerly Portugal Telecom, and Telemar, Brazil’s largest integrated telecom operator).

After the acquisition, América Móvil plans to combine Nextel with Claro to “consolidate its position as one of the leading telecommunication service providers in Brazil, strengthening itsmobile network capacity, spectrum portfolio, subscriber base, coverage and quality, particularly in the cities of São Paulo and Rio de Janeiro, the main markets in Brazil.”

For NII, selling Nextel in Brazil represents the end of an era. The company once operated mobile services in multiple North and Latin American markets, including the eponymous professional radio service in the US, which was later acquired by Sprint. Brazil is its last operation, where it has been struggling in a classic four-operator market. Not only has it not been able to break into the leader group, but also seen business declining fast. The revenues in 2018 were a 29% decline from 2017 ($871 million), which itself was a 12% decline from 2016 ($985 million).

“The announcement of this transaction marks the culmination of an extensive multi-year process to pursue a strategic path for Nextel Brazil and provides our best opportunity to monetize our remaining operating assets in light of the competitive landscape in Brazil and long-term need to raise significant capital to fund business operations, debt service and capital expenditures necessary to remain competitive in the future,” said Dan Freiman, NII’s CFO. Earlier potential buyers included Telefónica Brasil, Access Industries (NII’s JV partner), though the most concrete case was TIM, which, according to Reuters, approved a non-binding offer in November last year. None of these negotiations has come to fruition.

“Management and our Board of Directors believe the transaction is in the best interest of NII’s stockholders,” Freiman added.

BT shared rural network snub is not as it seems

Everyone agrees that there needs to be some sort of collaboration to meet the extra-ordinarily difficult coverage objectives of the Government, but BT is snubbing rivals’ latest plans?

According to The Times, O2, Vodafone and Three have tabled a plan which would see all four of the UK MNOs pool resources to tackle the digital divide. Shared infrastructure would reduce the financial burden of investing in geographical regions which offer little potential for ROI, due to the sparse or non-existent population.

At a breakfast briefing in London, Vodafone UK CTO Scott Petty laid out the concerns in a relatively simple fashion; sheep don’t pay phone bills. This is the challenge the telcos are currently facing; the vast majority of the UK’s population have coverage, but geographical demands of the government are a different kettle of fish (or herd of sheep). When no-one lives somewhere, what is the incentive to invest in infrastructure to provide coverage?

While this might seem like a reasonable approach, BT is reportedly taking issue with the plan, at least according to The Times.

“BT has already invested heavily to create the widest 4G coverage in the UK, and we are keen to collaborate with Government and industry to extend rural coverage into areas where there is none today,” BT said in a statement. “To this end, we have recently proposed a new model for consideration over the coming weeks.”

It has been widely reported BT is snapping the olive branch put on the table from rivals, but BT suggests this is just PR spin.

Reading into this statement, BT is not objecting to the idea of collaboration, the spin which has seemingly been played over the last few days, but suggesting a different approach. And from our perspective, it is a completely reasonable objection to make.

When you look at different coverage surveys and 4G connectivity analysis reports, EE is regularly crowned the best performer overall, and takes top-spot for most of the regional measurements as well. There is a simple reason for this; EE has spent more money improving its geographical coverage than its competitors.

While this is an achievement which should be applauded, the idea of rural roaming and generic shared infrastructure would erode this competitive advantage which it has been building towards. Don’t forget, EE has not been building out this 4G network because it is run by people who are just nice guys and want to help everyone in the UK. This investment has been made to give the team something to shout about and create an advantage when attempting to secure more customers.

EE wants to be able to go to potential customers and tell them they won’t only have better signal in all the normal places, but everywhere they could possible think of going. It’s a long-term strategic decision to put it in a stronger position than its rivals. Should there be any surprise EE does not want its rivals to benefit from the hard work, foresight and investments it has been making for its 4G networks?

Reading between the lines, this is what the objection is based around. BT is prepared to have discussions on collaboration to provide coverage in areas where there is none but allowing competitors to piggy back on its investments is a commercially idiotic idea. Why would it give away such a competitive edge in an industry where profits are so difficult to come by? It has made investments in commercially unattractive areas, so its rivals should have to as well.

From BT’s perspective, this is simply an attempt for rivals to increase connectivity coverage, but not having to pay for the achievement. Collaboration should be focused on areas where everyone is facing complications, not those where everyone aside from BT has an issue.

Another point to consider is whether a shared network would actually work from a differentiation perspective? The telcos are fighting for subscriptions, but if they are all using the same network in the rural markets, it becomes nothing more than a race to the bottom, eating away precious profits and marching towards utilitisation.

Finally, does such a broad-brush approach to geographical coverage actually work? Does the discussion about generic rural network sharing detract from the critical point, which should be focus on areas which have zero coverage, instead of those which have partial coverage? This is a six of one, half a dozen of the other argument, as while it sounds reasonable to concentrate on the areas which are complete data black spots, try telling that to Joe Bloggs who is potentially being screwed by only having a single provider to choose from.

This is an incredibly complicated argument, most of which has not been considered by the initial blame game which has been building over the last few days. When you take the nuances into consideration, there is no right answer, and neither are any of the suggestions wrong. In truth, something has to be prioritised, and not everyone is going to be happy with the final decision.

It might be easy to hurl blame towards BT/EE for its objection to a collaboration plan, but to do so without considering the commercial realities of the telco industry is incredibly lazy. BT/EE is objecting to this proposal, not to the idea of collaboration, but so would any other business which had built this position.

FCC casts an eye north of 95 GHz

The FCC has unveiled plans to create a new regulatory framework for spectrum above 95 GHz.

While these bands have largely been considered outside the realms of usable spectrum, progress in radio tech has made the prospects much more realistic. And, dare we say it, such a regulatory framework could begin to set the foundations for 6G…

“Today, we take big steps towards making productive use of this spectrum,” said FCC Chairman Ajit Pai. “We allocate a massive 21 gigahertz for unlicensed use and we create a new category of experimental licenses. This will give innovators strong incentives to develop new technologies using these airwaves while also protecting existing uses.”

The Spectrum Horizons First Report and Order creates a new category of experimental licenses for use of frequencies between 95 GHz and 3 THz, valid for 10 years. 21.2 GHz of spectrum will also be made available for use by unlicensed devices. The team envision usecases such as data-intensive, high bandwidth applications as well as imaging and sensing operations.

With this spectrum now on the table, the line between science fiction and reality could begin to blur. Data throughput rates will become almost unimaginably fast, meaning computational power in the wireless world could start to replicate the kind of performance only seen in human brains.

“One reason the US leads the world in wireless is that we’ve moved quickly to open-up new spectrum bands for innovative uses,” said Commissioner Brendan Carr. “We don’t wait around for technologies to develop fully before unlocking spectrum so that entrepreneurs have the incentives to invest and experiment.”

While such a statement suggests the FCC is doing a wonderful job, flooded with foresight, the industry tends to disagree.

In 2017, the mmWave Coalition was born. Although this is a relatively small lobby group for the moment, it does have some notable members already including Nokia and Keysight Technologies. This group has been calling for a regulatory framework above 95 GHz for 18 months, pointing to developments around the world and stating the US risks falling behind without amendments.

A good example of other initiatives is over in Europe, where the European Telecommunications Standards Institute (ESTI) has created the ISG mWT working group which is looking at how to make the 50 GHz – 300 GHz band work. This group has already been running trials with a broad range of members including BT, Deutsche Telekom, Intel, InterDigital and Qualcomm.

While the US is certainly taking a step in the right direction, it would be worth noting it is by no-means the first to get moving beyond the 95 GHz milestone. Europe is leading the charge at the moment.

However, Commissioner Jessica Rosenworcel believes the FCC is being too conservative in its approach.

“I believe that with these way-up-there frequencies, where the potential for interference is so low, we should flip the script,” said Rosenworcel. “The burden should be on those seeking exclusive licenses to demonstrate the interference case and justify why we should carve up an otherwise open space for innovation and experimentation.”

Rosenworcel points to the incredibly short-distance this spectrum will offer, as well as the creation of new antenna designs, like quasi-optical antennas, to ensure efficiency. With the shorter distance and better control of the direction of signals, interference does not pose a threat and therefore an unlicensed approach to spectrum should be prioritised.

Commissioner Michael O’Reilly is another who also supports this position.

“While I strenuously advocate for both licensed and unlicensed spectrum opportunities, I understand that it may be a bit premature to establish exclusive-use licenses above 95 GHz when there is great uncertainty about what technologies will be introduced, what spectrum would be ideal, or what size channel blocks are needed,” said O’Reilly.

Both of these messages effectively make the same point; don’t make assumptions. Taking the same approach to spectrum allocation will not work. The traditional approach of licensed spectrum allocation is perhaps unnecessarily rigid. It might be necessary in the future but granting innovators freedom in the first instance would provide more insight. Perhaps it would be better to react to future developments than to try and guess.

“Better that than being forced to undo a mess later,” said O’Reilly.

While it is of course encouraging the FCC is taking such a long-term view on industry developments, the team needs to ensure it does not over-complicate the landscape right now with unnecessary red-tape. Future regulation needs to protect innovation and grant the freedoms to experiment; a light-touch regulatory environment needs to blossom.

Apple issues weak response to Spotify’s claims of discrimination

Apple has presented its side of the dispute with Spotify, claiming it is treating the latter the same as other apps and it is reasonable to charge 30% of premium payment to apps.

Shortly after Spotify filed a claim at the EU against Apple for being discriminated by the latter’s App Store rules and practices, Apple released a statement to deny these claims and throw the accusations back at Spotify.

Apple argued for the 30% charge of premium paid to apps on App Store platform with a few justifications. “Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions,” the statement said. Apple also hastened to add that Spotify has left out policy that the revenue share will drop to 15% from the second year on.

On Spotify’s argument that Apple has restricted payment methods to Apple’s own payment system only, Apple retorted that it demands all “digital goods and services that are purchased inside the app using our secure in-app purchase system”.

There are a few layers in the reading of the attrition when each side is only talking its own side’s truth, but there are also bigger questions related to the whole digital economy. There are minor inconsistencies in Apple’s statement, for example it claimed that Spotify has made “substantial revenue that they draw from the App Store’s customers”, only to contradict a few lines below by playing down the App Store’s significance by saying “only a tiny fraction of their subscriptions fall (sic.) under Apple’s revenue-sharing model.” And there is no need for Apple to use the dubious accusation that Spotify is suing music creators. They (Spotify, Google, Pandora, Amazon) are not. They are appealing to overturn a court decision to increase royalty payment by 44%.

There is as much left unsaid as said. For example, Apple failed to address Spotify’s concern that Apple is both operating a platform and distributing its own competing products, in this case Apple Music. This was a point brought up in a conversation The Verge had with Sen. Elizabeth Warren, who did not include in her first list of companies to “break up”. “It’s got to be one or the other,” Warren told The Verge referring to Apple. “Either they run the platform or they play in the store. They don’t get to do both at the same time.” This resonates with Spotify’s accusation that Apple is being both the referee and a player.

It also does not give out the reason why Spotify, or any apps, should not have the option to handle payments within the app with equally safe payment system (e.g. credit cards).

Then there is the broader question whether app stores should be allowed to collect a commission fee for apps distributed on its platform. Technically Apple, and other applications stores like Google’s Play Store, could argue that they are a distribution channel and a retail outlet. Like other channels and retailers, they must charge a fee to sell the products. This side of the business would not be so significant for Apple earlier, as it was mainly using the app ecosystem to sell, and lock consumers in, iPhones. It is getting more meaning for the company now that the iPhone sales are slowing down while “Services” has become a meaningful part of the business. That is also a key reason why both Apple and Google are actively encouraging apps to move to subscription model to generate recurring income for the platforms.

But there has never been any justification why the fee should be as high as 30%, and Apple and Google have been well synchronised with their charge level (as well as dropping the fee from second year onward to 15%). This has become a significant additional cost for the app developers. Some with deeper pockets could absorb the cost and keep the retail price similar to other platforms (e.g. The Economist magazine). Those businesses operating on low margin or on a loss have to move the additional cost to users who opt to pay for the premium inside the app (e.g. Spotify). Other businesses simply choose to disable the option to upgrade to premium inside their iOS app to avoid the fee (e.g. the Financial Times newspaper).

Apple used Spotify’s partnerships with carriers as a supporting argument for the charge, saying “a significant portion of Spotify’s customers come through partnerships with mobile carriers. (This) requires Spotify to pay a similar distribution fee to retailers and carriers.” This may or may not true as each carrier deal with OTT services is different. Even if this is accurate, mobile carriers most likely are following the Apple’s and Google’s benchmark rather than the other way round.

Facebook reportedly facing criminal charges over data sharing

Facebook’s day started off with a major outage and, should reports turn out to be true, it is ending with the social media giant facing a criminal investigation from Federal prosecutors.

According to the New York Times, a grand jury in New York has obtained records from two smartphone manufacturers, via subpoena, which will detail the data sharing partnerships in or previously in place with Facebook. Sources has retained anonymity and it is not exactly clear who the subpoenaed parties were, though Facebook did have more than 150 such relationships in place before winding-down over the last couple of years.

Although the investigation has not been officially confirmed, it will come as a surprise to few considering the scrutiny those dominating the data-sharing economy are facing. Over the last few months, there have been numerous attempts to weaken the influence of the internet giants, with some even suggesting legal force to break-up the empires. The internet giants created a cosy position, but this is certainly under threat.

That said, while the scandals over the last 18 months might lead some to presume the practice of selling personal data would be scaled back, there seems to be little evidence of this. A recent Motherboard investigation suggests various US telcos are still reaping the benefits, and in some cases, scaling up the practice.

What is worth noting is the concept of selling personal information is not illegal, as long as the right consent has been obtained from the end user. This is what Facebook, and the third-parties who entered into such arrangements, are facing criticism for today. Accusers suggest proper content was not obtained or done so in such a complicated fashion it should not be considered valid.

The data-sharin