BEIJING — A recent decision by the United States’ Federal Communications Commission to repeal net neutrality, which are rules designed to prevent the selective blocking or slowing of websites, has wide-ranging implications for China, which never believed in net neutrality and banned hundreds of foreign websites. The decision could result in a major trade war involving Chinese telecom and Internet companies, which are interested in accessing the U.S. market, analysts said.

The move will allow American telecom service providers to charge differential prices for various services and even examine the data of their customers. Though this aspect has stirred controversy in the United States, the situation there is still very different from the realities in China.

“In China, the government is monitoring and controlling the networks whereas [in U.S.] it is, at least so far, it is telecommunication companies. At this point, the government does not have access, we know it does not have access to manipulating the flow of traffic in the U.S. Internet,” Aija Leiponen, a professor at Cornell University’s Dyson School of Applied Economics and Management, said.

The FCC decision could help U.S. telecom service providers offer high-priced premium services.

Trade war

But this would also open up an opportunity for U.S. service providers to charge high rates from foreign customers. At present, foreign companies can easily access the U.S. cyber market without facing the kind of resistance American companies encounter in China and elsewhere.

“I think it (FCC decision) has an impact potentially for Chinese technology companies that want to do business in the U.S.,” said Benjamin Cavender, a senior analyst at the Shanghai-based China Market Research Group (CMR). “You are asking about companies like Alibaba or Tencent, what this means for them in the U.S. markets– and I could very possibly see this being used as a trade war tool–and the U.S. government saying, ‘Look, we are going to restrict access to companies to our ISPs and force them to pay a lot of money.”

U.S. telecom companies are getting increasing integrated with content providers and might look at foreign players as a source of serious competition. They might go further and even consider blocking some foreign players, including Chinese Internet giants, he said.

“I can also see this happening that they (Chinese Internet firms) just get completely blocked because of the U.S. using this more as a trade tool trying to get more access to the Chinese market because if you are a U.S. technology company you are working at a great disadvantage in the Chinese market. I do see this being used as a trade tool,” Cavender said.

The point is about applying pressure on China to open up its Internet market to American players in exchange for similar treatment in the United States. Washington has usually avoided this kind of tit-for-tat game, but the situation may be changing under the Trump administration, analysts said.

“They (U.S. telecom companies) could at some point say, ‘Look, if you want to have confidential, fast access to the U.S. you have to kind of allow us to do the same thing, allow us to invest more heavily in Chinese firms.’ I could see that happening,” Cavender said.

Moral high ground

China has been advocating the idea of ‘Internet sovereignty,’ which allows governments to create boundaries in cyber space and block foreign sites that it perceives as potential threats to security. Proponents of ‘open Internet’ have been protesting against the idea of ‘Internet sovereignty.’

The Obama administration lobbied and argued with China for nearly a decade to open up Internet access for American companies like YouTube, Twitter and Netflix. It was an important aspect of the annual strategic economic dialogue between the two countries.

The FCC decision coupled with the controversy over alleged cyber spying by Russia is a moral boost of support for China’s online restrictions, which include a ban on major sites like Google, YouTube and Twitter. The moral high ground enjoyed by the United States under the past administration may be at risk, analysts said.

“Even democracies are beginning to think about the need to regulate content. So the Chinese, you know, might take a little comfort in that,” James Lewis, senior vice president of the Center for Strategic and International Studies in Washington, said. “When you look at Europeans talking about blocking each other’s content, when you look at the U.S. talking about blocking Russian political warfare, the Internet cannot be the wild west that it’s been for a couple of decades. So, everyone’s moving in this direction and I guess the Chinese can take comfort from that.”

Meanwhile, Chinese experts are protesting a new bill introduced in the U.S. Congress that would prevent branches of the U.S. government from working with service providers that use any equipment from two Chinese companies, Huawei and ZTE, for security reasons.

“This (prejudice towards Chinese companies) seems like a problem that can’t be solved, at least not in the short term,” Liu Xingliang, head of the Data Center of China Internet, told the Global Times newspaper in Beijing.

At the same time, “Chinese firms can’t give up the U.S. market and just focus on smaller countries if they want to really achieve their global goals,” Liu Dingding, an independent tech expert told the paper.

Reported by: Saibal Dasgupta, VOANews

Western New York

In a recent survey of 2,000 residents living in Erie County (Buffalo), N.Y., it was clear almost nobody trusts their internet service provider, and 71% were dissatisfied with their internet service.

Seventeen years after many western New York residents heard the word “broadband” for the first time at a 2000 CNN town hall at the University of Buffalo, where then U.S. Senate candidate Hillary Rodham Clinton called for increased federal funding for high-speed internet, many upstate residents are still waiting for faster access.

The Buffalo News featured two stories about the current state of the internet in western New York and found it lacking.

Erie County Executive Mark C. Poloncarz blames internet service providers for serving up mediocre broadband, and no service at all in some parts of the county he represents.

“It’s been put in the hands of the private sector, and the private sector has, for whatever reason, elected to not expand into particular areas or not increase speeds in particular areas, putting those areas behind the eight ball,” he said.

Poloncarz effectively fingers the three dominant internet providers serving upstate New York – phone companies Verizon and Frontier and cable company Charter/Spectrum. He argues that companies will not even consider locating operations in areas lacking the most modern high-speed broadband. The digital economy is essential to help the recovery of western New York cities affected by the loss of manufacturing jobs and the ongoing departure of residents to other states.

Poloncarz

An important part of Gov. Andrew Cuomo’s statewide broadband improvement initiative is prodding Charter Communications and its predecessor Time Warner Cable to do a better job offering faster internet speeds and more rural broadband expansion. The New York Public Service Commission, as part of its approval of Charter’s acquisition of Time Warner Cable, extracted more concessions from the cable giant than any other state. Among them is a commitment to expand the cable company’s footprint into adjacent unserved areas by 2020 to reach at least 145,000 homes and businesses now outside of Charter’s service area.

Last week, the cable company told the PSC it was ahead of schedule on its expansion commitment, now reaching 42,889 additional households and businesses, which is above its goal of 36,771. It has two years left to add at least another 102,111 buildings.

Charter also recently increased broadband speeds to 100 Mbps for 99% of its customers in New York and has committed to boosting those speeds to 300 Mbps by the end of next year.

But where Charter does not provide service, broadband problems come courtesy of western New York’s biggest phone companies – Verizon and Frontier. In Erie County, a broadband census found a lack of service in parts of South Buffalo, the far West Side and East Side of Buffalo, as well as in parts of every town in the county except in the prosperous communities of West Seneca and Orchard Park. Verizon FiOS can be found in a handful of well-to-do Buffalo suburban towns, but not in the city itself or in rural parts of the region.

Verizon spokesman Chris McCann said the company had no further plans to expand FiOS service in upstate New York, and stopped announcing additional expansions in 2010. In the rest of its service area, Verizon supplies DSL service as an afterthought, and has made no significant investments to improve or expand service. Frontier Communications, which is the dominant phone company in the greater Rochester region, also provides service in some other rural western New York communities, but its DSL service rarely meets the FCC’s minimum speed definition to qualify as  broadband.

Rep. Collins

Both phone companies have no plans for significant fiber optic upgrades that would boost internet speeds. There is little pressure on either company to begin costly upgrades. In rural communities, both companies lack cable competition and in more urban areas, both have written off their ongoing customer losses to their cable competitor. That leaves towns like North Collins in a real dilemma. Poloncarz told the newspaper residents frequently park in the town library parking lot at night to connect to the library’s Wi-Fi service, because they lack internet service at home.

A political divide has opened up between area Democrats and Republican officials on how to solve the rural broadband problem. Democrats like Poloncarz are exploring solving the rural internet problem with a county-owned fiber network that would be open to all private ISPs to assist them in expanding service. He is joined by Erie County legislator Patrick Burke, who thinks it is time to spend the estimated $16.3 million it will take to build an “open access network” across Erie County.

“There are literally geographic dead zones, and it’s unnecessary,” said Burke, a Buffalo Democrat. “There’s no excuse.”

Poloncarz is more cautious and told the newspaper he will only propose the idea if he is convinced it will solve the problem, but is willing to continue studying it.

Republicans from the western New York congressional delegation believe deregulation and other incentives may give private companies enough reasons to begin upgrades and expansion.

Rep. Chris Collins, a Clarence-area congressman with close ties to the Trump White House, defended FCC Chairman Ajit Pai’s recent decision to eliminate net neutrality. Pai was born in Buffalo.

Collins argues net neutrality only raised the cost of business for ISPs, and being rid of it would inspire cable and phone companies to boost investment in 105 exurban and rural towns in his district, which covers eight counties and extends from the Buffalo suburbs east to Canandaigua, 80 miles away. More than 65% of those areas are under-served because DSL is often the only choice, and at least 3.3% had no internet options at all.

Rep. Tom Reed (R-Corning) has just as many internet dead zones in his district, if not more. Reed represents the Southern Tier region of western New York in a district that runs along the Pennsylvania border from the westernmost part of New York east nearly to Binghamton. Much of recent broadband development in this part of New York comes as a result of Gov. Cuomo’s state-funded broadband expansion initiative, not private investment.

Reed has a record in Congress that is better at explaining the rural broadband dilemma than solving it.

“In a rural district, there are areas that are just physically difficult to serve,” Reed shrugged.

Collins’ hope that the banishment of net neutrality will inspire Frontier, Verizon, and Charter to use their own money to expand into the frontiers of western New York seems unlikely. Gov. Cuomo’s plan, which uses public funds to help subsidize mostly private companies to expand into areas where Return On Investment fails to meet their metrics has had more success.

But the rural broadband debate has been accompanied by a fierce pushback among upstate New Yorkers against the Republican-controlled FCC and elected officials like Collins who support the recent gutting of net neutrality. A backlash has developed in his district, and some have accused Collins of aiding and abetting a corporate takeover of the internet.

“The hysteria and narrative that this will kill the internet is blatantly false,” responded Collins. “Internet service providers have said they do not increase speeds for certain websites over others, and I have signed onto legislation that would make such a practice illegal.”

Altice’s American cable companies will help bail out the parent company’s struggling French operations.

Cablevision and Suddenlink are coming to the rescue of their parent company Altice in a deal that will transfer $1.5 billion from the two American cable operators to help bail out its struggling European operation, according to the Wall Street Journal.

Founding shareholder Patrick Drahi is splitting his U.S. cable operations away from Altice NV, spinning them off into a new publicly traded company known as Altice USA. But Drahi has also ordered the new U.S. company to pay a one time $1.5 billion dividend, most of which will end up in the bank account of Altice NV to help the parent company reduce its leveraged debts that have been largely responsible for its falling stock price.

While Cablevision and Suddenlink customers can look forward to additional rate increases, shareholders of Altice USA are being enticed to invest with sweeteners including an unexpected dividend payout and a sudden decision by Drahi to forego his usual management fee charged to companies he acquires to acquaint them with the “Altice Way” of doing business. That fee can amount to an initial $30 million payment plus an ongoing percentage (usually 2-3%) of a Drahi-acquired company’s future revenue.

Altice USA believes it can afford the bailout thanks to President Donald Trump’s tax cuts. In addition to using $2 billion of anticipated savings to pay for share buybacks, Altice USA hopes to quickly recoup an additional $1.5 billion from reduced taxes and revenue increases it will earn from customer rate hikes and new broadband customers.

Altice NV, soon to be renamed Altice Europe, was a veritable disaster financially — called the “worst large-cap performer in Europe” in 2017. At the center of Altice’s European operations remains the dismally performing SFR-Numericable, the French wireless and cable company. After Drahi acquired the company, he slashed costs and investments and threatened to lay off one-third of its workforce. Service deteriorated and customers canceled in droves. Investors starting selling their Altice shares around Halloween of 2017, after watching Mr. Drahi pile on unprecedented debt and become convinced Drahi’s highly leveraged company could not succeed.

The Wall Street Journal cautioned potential investors in Altice USA that the new venture will gladly take your money, but give shareholders almost no say in how it will be governed. Drahi has engineered his continued dominance of the new entity with control of at least 51% of voting rights.

Wall Street analysts are largely positive about the deal, noting Altice USA won’t be attached to Altice’s European money troubles and the company will have the ability to extract revenue from its customers with ongoing rate increases.

Residents of a handful of multi-dwelling apartments and condos in Boston, Washington, and Los Angeles will be able to kick the phone and cable company out of their units and switch to a fixed wireless provider offering 200 Mbps internet access for $50 a month.

Starry Wireless, from the man who brought you Aereo, the now defunct streaming service that used to offer local over the air stations but was sued out of existence, has spent more than a year testing its millimeter wave wireless technology in Cambridge, Mass. apartment buildings and is ready to expand.

A company promotional video explains Starry’s internet service. (1:53)

Starry is considered a startup, but is relying on budget-conscious pre-existing technology to deliver point-to-multipoint wireless internet service over a limited area. Using pre-standard 5G technology that relies on unlicensed millimeter wave spectrum, Starry’s service is provided from antennas mounted on multi-story buildings.

Because the technology isn’t revolutionary, Starry can utilize equipment already for sale in the marketplace. Some commercial fixed-wireless services already exist using a similar approach, and Google itself is developing a wireless gigabit internet service that is likely to eventually overtake its limited fiber rollouts.

Starry currently offers one plan – 200/200 Mbps with no data caps or contracts for $50 a month. The company claims it can deliver gigabit service using the same technology, but has chosen not to offer it at this time.

Reviews in the Boston area give the service high marks for performance, even in bad weather that was expected to create some problems for the line-of-sight technology. But the service also has its skeptics who believe the technology’s downsides limit its scale.

The biggest con to millimeter wave internet is that its range is extremely limited. Starry is only expected to serve multi-dwelling units in dense urban areas, where its mounted rooftop antennas can reach enough customers to cover the company’s costs. Neither Google or Starry have targeted their services to residential customers living in single home neighborhoods. Starry also must find receptive landlords willing to offer or lease space for its antenna equipment and tolerate mounted equipment, as needed.

Starry’s technology approach offers a concentrated signal with extensive bandwidth available to customers. Because its reach is so limited, each antenna will reach a smaller number of customers, making it unlikely the company will oversell its wireless capacity. Starry’s decision to not get into the gigabit business yet may be a way of ensuring it has enough capacity to deliver the speeds it advertises to customers before speeding things up.

Customers are strongly encouraged by the company to use its included Starry Station, a triangular Wi-Fi hub with a built-in Android-powered touchscreen controller to manage in-home Wi-Fi. This device normally retails for around $300, so bundling it with internet service makes it a good deal. But the device gets mixed reviews. Some criticized it as over-engineered and unstable. Many reviewers complained about poor Wi-Fi coverage and randomly dropped wireless signals. Others complained it tends to lock up, which may be the result of overheating. Many noticed the unit generates a lot of heat, presumably from its built-in power supply and Android touchscreen interface. It requires a noticeably loud built-in fan, which runs continuously, to manage cooling duty.

The Starry Station did not get great reviews for its performance or the amazing amount of heat it generates. (2 minutes)

Despite the expansion into Los Angeles and Washington, Starry can still be considered a beta level service and availability will remain spotty for some time. During 2018, Starry expects to begin limited service in: New York, Cleveland, Chicago, Houston, Dallas, Denver, Seattle, Detroit, Atlanta, Indianapolis, San Francisco, Philadelphia, Miami and Minneapolis.

Hulu has picked up an additional five million customers since the streaming service last reported subscriber numbers in May 2016 — an increase of 42 percent.

That gives the streaming service more than 17 million paid subscribers, with a potential shared household audience of 54 million.

Hulu’s growth is attributed to a dramatic increase in its catalog of television series, original productions, and movies. When the service launched, it primarily showcased selections of recent episodes from current network shows aired by Hulu’s owners — Walt Disney Co. (ABC), Comcast Corp. (NBC), 21st Century Fox Inc. (FOX), and Time Warner Inc., and a handfuls of seasons of older series no longer airing on network television, many originally running on CBS.

Hulu has gradually shifted away from a free, ad-supported streaming service to a paid subscription model offering subscription options for limited or no commercials. As Hulu’s content library grew and the service offered a more complete library of series, it has also picked up subscribers. Much of its recent growth has come from attracting new subscribers seeking Hulu’s new original shows and a deep catalog of older series from the United States and United Kingdom. Hulu also improved its movie catalog with a larger selection of popular movie titles, some relatively recent.

In 2017, Hulu introduced a cable television replacement service offering live and on-demand programming from a wide selection of cable networks and a significant number of local network affiliates. Today, Hulu offers more than 75,000 episodes of 1,700 different television shows and features — more than double than any of its competitors.

But Hulu still has significant room to grow to reach Netflix, which has more than 109 million customers worldwide, including 52.8 million in the U.S., as of the end of September.