Will private networks allow wireless ISPs like AT&T and Verizon to skirt net neutrality regulations?
We’ve all heard a lot in the news about net neutrality – where all internet traffic is handled and treated in the same manner. The idea behind net neutrality is admirable: with so much content being created, net neutrality says it would not be a good idea to let one group obtain access to content in preference to another.
This is the same thesis underlying most utilities such as electricity, basic telephone service, water and gas: they are all provided to the public without preference. You sign up, pay the rate and get access to the service.
But, access to internet content has not always been offered as if it were a utility. Rather, some groups (e.g. Netflix) have been able to strike deals with some internet service providers to provide its customers with preferred access in exchange for guaranteed delivery of their content. Netflix streaming subscribers (vs. DVD subscribers) would not be happy to see the movies they are watching stutter and slow down while they are watching them.
While all this sounds great, it’s much harder to implement. For example, take wireless communications. As most everyone knows, communications over wireless links is slower than wired links, often by a factor of 10 or more. With the new LTE wireless communication protocol users can experience in the order of 10 megabits per second download speeds, sometimes a bit faster or slower depending on weather and buildings and signal strength. But, wired connections can be 100 Mbps or more.
And, with new fiber optics connections, users are able to experience 1 gigabit per second or more. The upcoming “5G” wireless communications protocol will achieve 100 Mbps or faster speeds – 10 times faster than LTE, but still one-tenth the speed for fiber optics.
It would be natural to think there should be some special provisions for companies that are communicating over wireless links. After all, they can’t match the speed of wired networks so perhaps network neutrality shouldn’t be required for wireless communications. Those companies using wireless links perhaps should be able to work out special deals with wireless operators. Again, taking Netflix, it would seem perhaps appropriate that Netflix should be able to set up special high-speed preferences to stream movies over wireless links to their subscribers.
Initially, Federal Communications Commission Chairman Tom Wheeler was going to treat wireless separately in essence giving them a “pass go” card so they would not have to comply with network neutrality. But, it’s turned out the FCC – as directed by the White House – wants to require network neutrality for all communications networks so that no one company can work out special arrangements to get preferential treatment (meaning faster communications or preferred access privileges) than any other company.
On the side of the consumer, the speed of delivery for any content can be tailored to the amount the user pays. Thus, if someone wants to pay for faster delivery, the ISP can provide that, but not preferentially based on any specific type of content. Thus, you can’t buy a special high-speed service that provides faster access to just Netflix and not to other sources of content.
However, network neutrality requirements don’t apply to completely private networks. If Netflix and, say, AT&T were to build a network entirely paid for privately and doesn’t connect to the public internet, then they could provide preferential, higher speed services to some customers and not to others. While something like this may not happen in rural areas, it’s certainly feasible it might happen in some metropolitan areas.
One might ask, “why do you need such fast network delivery in the first place? What can someone do with a 1 Gbps network anyway?” The answer is video or, to be more precise, the delivery of multiple concurrent video streams to a subscriber. A family of five could be watching five different movies at the same time. That requires a lot of bandwidth.
When you see crews digging and installing bright orange cables in and around your neighborhood (as they are in north Atlanta presently), the major ISPs and video delivery firms such as AT&T U-verse, Comcast and – watch out – Google Fiber are all constructing new fiber optic lines to homes. This is a slow, but eventual pervasive rewiring of America much like what happened with the advent of cable 40-plus years ago.
For most of us, we may not think we need newer, faster speed wired and wireless networks. However, as the content providers begin to transmit video in ultra-high definition, the requirements for more bandwidth will only go up. And, I expect that by 2050 or soon thereafter, the next generation of higher definition video will drive demand even higher for both wired and wireless communication delivery networks.
Network neutrality will assure that everyone will have equal access to the public networks so no matter where you live, high-speed internet (data and video) will be available. It will be interesting to see if content providers work with ISPs to build private networks to get around net neutrality.
J. Gerry Purdy, Ph.D., is the principal analyst with Mobilocity LLC and a research affiliate with Frost & Sullivan. He is a nationally recognized industry authority who focuses on monitoring and analyzing emerging trends, technologies and market behavior in mobile computing and wireless data communications devices, software and services. Purdy is an “edge of network” analyst looking at devices, applications and services as well as wireless connectivity to those devices. He provides critical insights regarding mobile and wireless devices, wireless data communications and connection to the infrastructure that powers the data in wireless handheld devices. Purdy continues to be affiliated with the venture capital industry as well. He spent five years as a venture adviser for Diamondhead Ventures in Menlo Park, California, where he identified, attracted and recommended investments in emerging companies in the mobile and wireless industry. Purdy had a prior affiliation with East Peak Advisors and, subsequently, following its acquisition, with FBR Capital Markets. Purdy advises young companies that are preparing to raise venture capital, and has been a member of the program advisory board of the Consumer Electronics Association that produces CES, one of the largest trade shows in the world. He is a frequent moderator at CTIA conferences and GSM Mobile World Congress. Prior to funding Mobilocity, Purdy was chief mobility analyst with Compass Intelligence. Prior to that, he owned MobileTrax LLC and enjoyed successful stints at Frost & Sullivan and Dataquest (a division of Gartner) among other companies.
Editor’s Note: Welcome to Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
