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Driver-less cars and the nanny state on steroids

Posted May 12th, 2016 in spectrum, unlicensed spectrum, Wi-Fi, wireless communications and tagged by Alton Drew

I’m not a fan of the driver-less car concept. What’s the fun of a driver-less car unless the car itself is not fun to drive to begin with. What’s not so fun is a brewing fight over the best uses for unlicensed spectrum as driver-less car producers bump heads with communications providers. In this article from The Washington Post, there is a discussion about a proposal from Transportation secretary Anthony Foxx that would require all new cars be equipped with car-to-car communications devices. These devices would operate within 75 Mhz of the 5,9 Ghz band. Groups, like the National Cable and Telecommunications Association, argue that spectrum is running out and unlicensed spectrum needs to be made available to fill the gap.

Unlicensed spectrum has been touted as a space for technology and communications innovation. It’s the area in the electromagnetic spectrum where certain wireless devices play including WiFi hot spots, medical equipment, wireless headsets, remote car door openers, wireless keyboards, and cordless phones. With cognitive radio technology, unlicensed spectrum’s vulnerability to interference can be addressed making unlicensed spectrum an emerging alternative for carrying communications.

The only long-term benefit I see from driver-less cars is that flowing to companies like Zip Car. Uber drivers should be scared shitless because why get in a car with a driver with a criminal record when all you have to do is call up a driver-less car from Google. And while the State makes an argument that driver-less cars can reduce the number of non-alcohol related accidents by 80%, shouldn’t drivers (and the insurance companies that issue policies) be prepared to take on the costs of accidents?

I would rather see every available piece of spectrum provided to households that pursue a self-sustainable path. For example, using unlicensed spectrum for their internal needs like monitoring electricity usage or connecting their homes to their rooftop solar panels or wind turbines. Or using unlicensed spectrum to connect with neighbors and public safety.

The Obama administration’s nanny-state approach to the use of unlicensed spectrum by going to bat for initiatives like driver-less cars is a waste of a valuable resource.

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What regulators say about the internet of things

For the past two or three days the chairmen of the Federal Communications Commission and the Federal Trade Commission have been clarifying their regulatory agendas for and approaches to the Internet.  FCC chairman Tom Wheeler plans to issue net neutrality rules around 5 February with the full FCC voting on those rules on 26 February.  Media reports have Mr. Wheeler outlining what he believes the benefits consumers would enjoy from reclassifying broadband as an old school, run-of-the-mill telephone company.  For example at the Consumer Electronics Show in Las Vegas Mr. Wheeler reportedly said the following:

“So, there is a way to do Title II right, that says there are many parts of Title II that are inappropriate, and would thwart investment, but that a model has been set in the wireless business.”

CTIA-The Wireless Association has taken the position that given the level of competition for mobile broadband that net neutrality rules should be “mobile broadband specific” and that mobile broadband has never been regulated under Title II.

Mr. Wheeler, in an attempt to keep net neutrality advocates happy, appears to be willing to use Title II regulation to strike down deals between content providers and broadband operators where content providers pay to have their traffic given higher priority over other providers.  Mr. Wheeler wants the role of determining which transactions and agreements are commercially reasonable and how that traffic should be moved from content provider to broadband provider to ultimate end user.

FTC chairman Edith Ramirez’s approach appears to focus more on transparency of participants in information markets.  Her concern, as shared with CES participants, is about privacy and the Internet of Things. As more devices connect to each other via the internet, more devices become subject to hacking and a wealth of data, thought by consumers to be private, becomes subject to misuse, theft, or fraud.

Ms. Ramirez’s focus on the consumer is not surprising given the nature of her agency’s work, but it also seems the slightly, and I mean slightly, better approach to overseeing market behavior versus individual business behavior.  The internet is a platform for information exchange between information generators and information seekers.  The more information that a provider has on how her information is going to be used in the markets helps her make better decisions not only on whether she should make it available but also on its value and how best to monetize her data. Information gatherers will simply have to provide better incentives to information providers to get them to give up their data.

What kind of growth does the market see for the Internet of Things?  According to Cisco’s Internet Business Solutions Group, some 25 billion devices will be connected to the internet by the end of 2015.  That number will climb to 50 billion connected devices by the end of 2020.  That’s a lot of broadband infrastructure for the FCC to oversee and more hacking access points for the FTC to worry about in five short years.

Investors will see the biggest gains in the infrastructure space of the Internet of Things.  Leading growth in this space will be manufacturers of processor chips, wifi networks, sensors, and software.  Investors should also be concerned with factors that impact demand for devices that talk to each other and I believe the factor that has the heaviest weight is the consumer privacy factor.  Devices aren’t just talking to each other but are gathering information on consumer likes and habits and storing this data for the information gatherer’s future use.  Privacy is an immediate and long term issue because it concerns one half of the parties involved in the information market transaction: the consumer.

As for the FCC’s open access approach it is too short-sighted.  Mr. Wheeler’s focus on competition for broadband service and equal treatment of traffic may have a nice sounding populist ring, but in the internet eco-system what matters is the consumer’s choice of product obtained through broadband.  That product is content and the price the consumer pays in exchange for that content is, ironically, content in the form of personal data.  Consumers already have wireless and wireline choices for broadband access.  The value play for consumers lies in the quality of content available online and consumers are more than capable of deciding that for themselves.

What the government can do is what it does best (albeit it is not the best at it, but work with me); government should adjudicate privacy and other consumer disputes and make available to consumers information that they may not be able to gleen readily from the private sector.  The FTC’s focus on privacy and consumer protection does a better job at this than the FCC.

I’ll go out on a limb and say that the private sector is taking care of the FCC’s mandate of ensuring a nationwide communications network.  The FCC’s focus given the growth in the mobile market and the increasing need for devices to wirelessly connect should remain on allocating spectrum and assuring the reliability and safety of wired and wireless communications infrastructure.  Any other endeavor is waste.

 

 

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The FCC does not owe Marriott an unencumbered revenue stream

According to a petition filed with the Federal Communications Commission by Marriott International and other hotels, Marriott would like to the FCC to declare that a hotel’s management of its wifi networks does not violate section 333 of the Communications Act if management of its wifi operations interfere with wifi hot spots authorized under the FCC’s rule 15.  Sounds more like the hotels would like to protect one of their revenue streams.

From a business standpoint I’m not surprised, but if the FCC allows Marriott’s petition, in my opinion they run the risk of contradicting themselves on the policy of an open Internet, specifically the policy of allowing consumers to attach any lawful devices to the #internet for use by the consumer.

In addition, Marriott would like the public and the FCC to believe that this is not a #netneutrality issue. Granted I’m no fan of net neutrality but if you want to promote consumer access to websites of their choice, shouldn’t the FCC ensure that the consumer can access those sites using the lawful devices of their choice?

Given the proliferation of hot spots, it makes better business sense for hotels to discontinue their wifi services. Over 80% of consumers have cell phones and hot spots are less expensive than phones. Simply put in your brochures that you do not offer wifi and that you better buy a hot spot from AT&T or Verizon or a hot spot enabling smart phone before making that business trip.

The FCC does not owe Marriott or any other hotel an unencumbered revenue stream.

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Dear Al Franken. You’re missing the globe for the bushes

The U.S. Senate Judiciary Committee met today to give their thoughts about the proposed merger between media companies Comcast and Time Warner Cable.

Wait a minute.  Did I say media companies?  Yes I did.  Comcast and Time Warner Cable provide end-users with access to content, whether they purchase that content from programmers such as ESPN or produce that content themselves, such as through their regional sports networks or other entertainment networks.  The questions posed by most of the senators displayed either their ignorance or fear of Comcast and Time Warner’s new roles as content providers.  Their unique position as owners of video distribution pipes that go into the homes of consumers shouldn’t lessen their primary roles as content providers nor should ownership of transmission mediums be the primary determinant of the legal and regulatory framework for their oversight.

Senators like Al Franken, Democrat of Minnesota, have the tendency to focus on small issues that generate the most political excitement and this tendency results in myopic analysis of the issue in front of them.  The senators rather focus on consumer issues of increased prices for ESPN and sports blackouts.  They would rather cater to testimony from content providers complaining about their inability to get their products displayed the digital version of a grocery store shelf, complaining that the store brand is getting the prime spot in the middle of the eye level shelf.

Take for example the testimony of James Bosworth, chief executive officer of Back9Network Inc.  Back9Network provides video programming that promotes the golf-lifestyle.  Mr. Bosworth argues that for independent programmers like his company, it will be near impossible to compete against similar programming provided by Comcast.  Mr. Bosworth would like the merger halted because he believes his firm will not be able to compete with Comcast’s other golf and/or lifestyle programming.

Could the real issue be that programmers such as Back9Network don’t bring much value to the end-user much less the “digital grocery store” that is Comcast to put it in a deserving position for more eyeballs?  In an industry allegedly valued at $177 billion with approximately 26 million golfers, maybe Back9Network, still an infant having been in business only since 2010, hasn’t come up with that compelling business model that Comcast’s David Cohen admits is necessary for the company to place a network in its network line up.  Maybe programmers need to focus on creating something that people want to see in the first place.

But there is something more fundamentally telling in this debate over the merger of Comcast and Time Warner.  If there are so many independent programmers out there jostling for room on a media company’s platform, maybe it’s time for programmers to explore technological alternatives for getting their products into market.  For example, why couldn’t independent programmers combine their content, establish a network, and distribute their programming to end-user laptops, tablets, and smartphones via Roku devices similar to the services provided by Aereo.

Mr. Franken and other senators would rather see the media bottleneck forcibly widened by denying mergers like the proposed Comcast-Time Warner combination.  Instead, politicians and policymakers should promote alternative methods of distribution, especially for content providers who are still trying to make a compelling case that their content provides consumer markets sufficient value.

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Entrepreneurs in the U-NII space get some relief from the FCC

The Federal Communications Commission took action today that hopefully provides further incentive for investment in the creation and deployment of U-NII wireless devices that operate in the 555 megahertz portion of spectrum in the 5 gigahertz band.  Specifically, U-NII devices are unlicensed intentional radiators that use wide band modulation techniques to provide a wide array of high data rate mobile and fixed communications for individuals, businesses, and institutions.

Since setting aside this portion of spectrum for unlicensed use in 1997, the FCC believed that enough time had passed where it could modify Part 15 of its rules regarding use of devices in this portion of spectrum.

U-NII refers to the Unlicensed National Information Infrastructure which is designated to provide high-speed, short range wireless networking communication at a low cost.  U-NII consist of three frequency bands of 100 megahertz each in the five gigahertz band; the 5.15-5.25 Ghz (U-NII-1, indoor use only); 5.25-5.35 Ghz (U-NII-2A); and the 5.725-5.825 Ghz band(U-NII-3).

The primary concern that Part 15 of FCC rules was designed to address is interference by U-NII devices with licensed devices or operators that also occupy the five gigahertz band.  With the rule modification, the FCC intends to make use of the 100 megahertz in the 5.15-5.25 Ghz range more beneficial to operators and device makers by removing the indoor use restriction and boosting permissible power used for these devices.

Unlicensed devices operate at very low power over short distances and employ various techniques in order to reduce interference to others as well as themselves.  The unlicensed operator must accept whatever interference it receives while correcting whatever interference it causes.

Innovators impacted by the FCC’s decision include those that provide WiFi hot-spots, wireless home local area networks, wireless Internet service providers in rural areas, and facilities that provide offloading of wireless traffic from commercial wireless service providers.

Ac cording to the FCC, unlicensed spectrum contributed $222 billion in value to the U.S. economy in 2013 and approximately $6.7 billion to gross domestic product.