A new research report issued by Time Warner Cable concludes cell phone companies like AT&T and Verizon Wireless cannot meet the future data demands of customers over their 4G LTE wireless networks without punitive usage caps and high fees to deter usage, even with new spectrum becoming available for the wireless industry’s use.

The report, authored by Michael Calabrese of the New America Foundation, finds an answer to this problem in Wi-Fi, which can offload wireless traffic and deliver wireless service customers already prefer:

There is simply not enough exclusively licensed spectrum to meet the rapidly rising demand for wireless data, to sustain a competitive market, and to keep prices at an affordable level.

Major mobile carriers are increasingly coming to grips with this reality. The Wireless Broadband Alliance, a global industry group, reports that Wi-Fi offloading has become an industry standard as “18 of the world’s top 20 largest telcos by revenue have now publicly committed to investing in deploying their own Wi-Fi Hotspot networks.” The industry is shifting steadily toward what it calls heterogeneous networks (HetNets)—i.e., a combination of licensed and unlicensed infrastructure—in order to meet their customers’ insatiable demand for data while keeping costs down.

Alcatel-Lucent forecasts an increase of “87 times [the current] daily traffic on wireless networks” over the next five years, with 50 percent of that traffic on cellular networks “while the remaining 50 percent will be offloaded to Wi-Fi.”

Cisco’s own studies back Calabrese’s findings on consumer preference towards Wi-Fi.

“Given a choice, more than 80 percent of tablet, laptop, and eReader owners would either prefer Wi-Fi to mobile access, or have no preference,” Cisco concluded. “And, just over half of smartphone owners would prefer to use Wi-Fi, or are ambivalent about the two access networks.”

The Cisco surveys found users are choosing Wi-Fi over mobile connectivity for reasons of cost, “because it doesn’t impose data-usage caps or reduce their mobile data plan quotas.” But the primary reason for choosing Wi-Fi “is that respondents find it much faster than mobile networks.” And since Wi-Fi traffic travels over increasingly upgraded wireline networks, that speed differential may only increase as more and more homes, businesses and retail outlets upgrade to fiber optic or other high-speed connections of 100Mbps or more.

America’s largest wireless carriers have fallen far behind offering Wi-Fi services to customers compared to their overseas colleagues:

• AT&T: More than 32,000 Wi-Fi hotspots are available at partnered retail businesses, restaurants, and high-traffic areas like stadiums and major tourist destinations;
• Verizon Wireless: Verizon has an insignificant Wi-Fi presence, with a small number of unadvertised hotspots in selected venues like airports and convention centers;
• Japan’s NTT DOCOMO: Up to 150,000 hotspots, up from only 8,400 in 2o12.
• China Mobile: More than 2 million hotspots are up and running carrying 70 percent of the company’s data traffic.
• France’s Free Mobile: More than 4 million residential hotspots are available through Free’s parent – Iliad.

Comcast could soon be the nation’s largest Wi-Fi hotspot provider.

Calabrese argues it is important for the United States to set aside significant spectrum for unlicensed wireless networks like Wi-Fi to meet future wireless demands. Currently, some Republican members of Congress are opposed to significant spectrum set asides they feel could best be monetized for private use through the spectrum auction process.

It is no coincidence that Calabrese’s findings would be released by Time Warner Cable which itself is growing a Wi-Fi presence in certain cities where it provides cable service.

The wireless carriers’ collective lack of interest in an aggressive nationwide Wi-Fi deployment may have provided a strategic opening for cable operators to fill that gap with Wi-Fi networks of their own. Cable operators consider them a useful tool to retain customer loyalty — access is typically free and unlimited for current customers.

This summer, Comcast announced a “neighborhood hotspot initiative” that will turn millions of customer cable Internet connections into shared Wi-Fi hotspots using a dual-use wireless home gateway. The equipment will offer two separate Wi-Fi signals — one intended for the customer and the other open for use by any Comcast customers in the neighborhood. The cable company will provision extra bandwidth for the open Wi-Fi network to ease concerns that guest users could theoretically slow down a customer’s own Wi-Fi channel. In a relatively short period, Comcast could become the nation’s biggest Wi-Fi network offering more than 20 million hotspots hosted by the company’s own broadband customers.

Calabrese points to the future of seamless transitions between wired, wireless 4G and Wi-Fi network access without dropping calls or data connections. Many customers won’t even know the difference.

The author recommends the FCC think about reserving space for new unlicensed “citizens band” frequencies dedicated for public and private Wi-Fi networks:

• The FCC should reorganize the UHF TV band to ensure the availability of at least 30 to 40MHz of unlicensed spectrum in every media market, perhaps including Channel 37 (now reserved for radio astronomy) and eliminating two dedicated channels reserved for wireless microphones;
• Open the grossly underutilized 3.5–3.7GHz federal band for unlicensed small cell antennas delivering a ‘Citizens Broadband Service.’ This band is now mostly used for offshore naval radar, allowing both services to co-exist without mutual interference;
• Expand unlicensed access to the 5GHz band by allocating the 5.35–5.47 and 5.85–5.925GHz bands providing contiguous, very wide channels useful for the 802.11ac Wi-Fi standard that can support very high-speed wireless services.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/XFINITY Wireless Gateway Powers Connected Home Summer 2013.flv[/flv]

Comcast talks about their new X3 Wireless Gateway which is capable of providing two separate Wi-Fi networks, one for the customer and another for the neighborhood. (2 minutes)

If your smartphone goes missing or gets stolen, should you still have to pay Verizon Wireless for service you no longer have?

Verizon Wireless apparently thinks you do, even if you are beyond your two-year contract and pay month-to-month.

KGO-TV’s consumer reporter discovered Verizon Wireless dings customers coming and going.

Bonnie Mich, a Verizon Wireless customer in Healdsburg, was stunned when Verizon insisted she had to keep paying service charges on a cell phone she no longer owned.

“I said, ‘I don’t have a phone. I’m not under contract. I have no service from you. That is ridiculous,'” Mich told 7 On Your Side reporter Michael Finney. “I was angry. I didn’t think it made sense.”

Although Verizon did agree to suspend the calling plan portion of her bill for the missing phone, it wouldn’t agree to do it for free:

A charge of $15.35 was applied six days after her phone was stolen. The explanation? Verizon charges a fee when a customer service representative temporarily suspends service on a lost or stolen phone.

The following month, Mich decided to take her business to another wireless company, but Verizon Wireless was ready for that possibility. Verizon Wireless placed a block on number transfers, meaning Fich wasn’t going anywhere until Verizon was paid an extra $17.51 in service charges to remove the phone number transfer block.

Mark Toney, executive director of the Utility Reform Network told KGO Verizon had no justification for charging those fees and called the situation “a total rip off.” Toney advised customers to complain directly to state regulators and demand Verizon Wireless credit the charges and/or refund the customer.

When KGO called Verizon, an apology came quickly:

“We did not meet our own standards and reiterate our apology to our customer,” Verizon said in an e-mail message to the television station, promising a refund.

Mich reports she is still waiting.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KGO San Francisco Do you have to pay the bill if your cellphone gets stolen 10-3-13.mp4[/flv]

KGO in San Francisco reports a stolen or lost Verizon Wireless cell phone can be cost you more than you think. (3 minutes)

A sweeping deregulation measure sponsored by Verizon Communications would end the telephone company’s obligation to provide landline service and remove state-mandated customer quality of service standards in Massachusetts.

House Bill 2930, “An Act modernizing telephone regulation and encouraging economic growth,” introduced by Rep. Stephen L. DiNatale (D-Fitchburg) is succinct:

SECTION 1. Chapter 25C of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after section 7 thereof the following sections.

Section 8. Notwithstanding any other general or special law to the contrary, the department shall have no jurisdiction, general supervision, regulation or control over wireless service, including mobile radio telephone service, or radio utilities.

Section 9. Notwithstanding any general or special law to the contrary, subject to the provisions of section 10 of this chapter, no provision of this chapter, Chapter 25 or Chapter 159, 8 and no regulation, order or settlement or portion thereof adopted pursuant to any such provision, shall apply to any telephone company (or a common carrier offering telephone service) in any municipality for which the company or carrier certifies to the Office of Consumer Affairs and Business Regulation that there are at least two providers offering voice telephone service to retail residential customers in that municipality using any technology, including but not limited to wireless voice service and VoIP service.

Section 10. Nothing in sections 8 or 9 of this chapter shall be construed to affect or modify:
a. the authority of the attorney general to apply and enforce chapter 93A or other consumer protection laws of general applicability;
b. the department’s authority under sections 18B and 18H of Chapter 159, concerning enhanced 911 service, and under section 15E of Chapter 166, concerning telephone relay service;
c. the rights or obligations of any carrier under 47 U.S.C. § 251 or 47 U.S.C. § 252; or
d. the department’s authority to administer the federal Lifeline and Link-up programs or the Connect America Fund.

SECTION 2. Sections 11, 12, 12A, 13, 14 and 15 of Chapter 166 are hereby repealed.

The measure was discussed at a hearing this week before the Legislature’s Energy & Telecommunications Committee. Verizon argued its company is still regulated as if it was a monopoly, with reporting requirements and customer service mandates that do not apply to its competitors in the cable or wireless industry.

DiNatale

“We have to answer a customer’s call within x number of seconds,” said Verizon spokesman Phil Santoro. “If we don’t, we get penalized. No other company that provides phone service has to do that. They’re all regulations that were formed when we were a monopoly, and they haven’t been changed.”

Verizon lobbyist Joe Zukowski told the Boston Business Journal Verizon is required to respond to repair calls within a 24-hour window, something not required of its biggest competitor Comcast. Verizon has to report its annual finances and various customer metrics governing response times and outages to state regulators. Verizon also has to offer landline service anywhere in its service area across most of the state, while cable companies can pick the places they wish to serve.

DiNatale regularly supports Verizon’s legislative initiatives. In 2012, he proposed a bill to amend state law to remove the authority of the Department of Telecommunications and Cable to regulate the wireless industry, deferring instead to federal regulations that industry representatives said would level the playing field.

DiNatale suggested Massachusetts could be left behind if the legislature didn’t adopt the measure. Rep. Randy Hunt, a Sandwich Republican, asked if Massachusetts had missed out on any innovations in technology because of overregulation. Zukowski suggested a Massachusetts legislature hostile to business interests would make the company think twice about expanding its 4G LTE network in the state. By November, the bill was effectively buried in a legislative maneuver and by June 2013, Verizon announced it largely completed its 4G LTE upgrade, regardless of the bill.

DiNatale’s latest bill includes last year’s wireless oversight ban as well as forbidding the Department of Telecommunications and Cable from regulating Verizon in any part of the state where at least one provider of any kind offers competitive service.

Despite DiNatale’s attempt to ban state regulation of wireless service,  Sen. Karen Spilka (D-Ashland), argued at Tuesday’s hearing for (S 1617), “The Cellphone User’s Bill of Rights,” that would require clearly published prices and service policies, monitors the quality of cell service in the state, and limits all cell contracts to 12 months.

“Many people don’t have landline phones anymore. However, as wireless subscribership increases, so do complaints about the contracts and services,” Spilka told the committee.

Zukowski suggested that rural areas will still be covered by regulation where Verizon maintains a monopoly. But the legislation eliminates regulation from any part of the state where even one competitor promises to provide service. AT&T Mobility alone would give Verizon an effective way out of regulatory oversight, because AT&T claims it already provides solid service to the majority of the state.

AT&T Mobility claims its competing cell service is available across almost the entire state of Massachusetts. The areas boxed in red are the only significant parts of the state without claimed coverage by AT&T.

There are only about three dozen or so towns in the state with no cable voice service, and even fewer with significant sections that have no cell phone service, all in the sparsely populated rural central and western parts of the state.

Other key components of this and another bill Verizon is supporting this term:

• Verizon would end its commitment to provide universal service in the state. Under the terms of the bill, Verizon could also justify ceasing rural landline service and offer an alternative such as Voice Link, a wireless landline replacement not subject to state oversight;
• Verizon would not have to report finances and customer service metrics and would no longer have to meet mandated customer service standards;
• State authority to compel reliable E911 service without any charge to the calling party and mandates regarding service for the disabled are weakened or eliminated;
• Elimination of a requirement providing Verizon customers with 10 free directory assistance calls per month, unless the customer is certified as elderly or disabled;
• Impose clear terms that wireless service is off-limits to state regulators.

The bill is co-sponsored by: Rep. Stephen Kulik (D-Worthington), Sen. Anthony Petruccelli (D-East Boston), Rep. Kathi-Anne Reinstein (D-Revere), and Sen. Sal DiDomenico (D-Everett).

Before -and- After

Hopes for increased Canadian wireless competition were dashed last week when Industry Canada released an official list of approved spectrum auction bidders mostly filled with familiar names.

Fifteen Canadian participants including market-dominant Bell, Rogers and Telus each put down a refundable 5% deposit for the Jan. 14 auction. Most of the rest of the bidders are regional providers or suspected spectrum speculators hoping to sell any acquired spectrum at a profit.

It was good news for the three largest cell companies which feared the possibility of a well-funded new entrant like Verizon Wireless. Instead of facing the deep pockets of Verizon, the three cell companies will be competing against regional providers like Quebec’s Vidéotron, Bragg Communications’ EastLink which serves Atlantic Canada, and provincial telephone companies MTS in Manitoba and SaskTel in Saskatchewan.

Two private equity firms are also participating: a subsidiary of Birch Hill Equity Partners and Catalyst Capital which holds the debt for independent Wind Mobile. Wind Mobile’s owner Globalive Communications is also registered as a participant. Both could use the airwaves in the Wind Mobile business or sell them to another provider.

“Ultimately, what would have been great is to have a well-capitalized startup, a feisty competitor coming in,” telecom analyst Troy Crandall told the Canadian Press news agency. “That would have been the best thing for consumers.”

But Canada’s best hope for lower cell phone bills was never to be found from Verizon Wireless.

“I can assure our investors that we never have and never will be leading on price,” Lowell McAdam told investors at a conference last week.

C Spire, a wireless phone company serving the southeastern United States today announced ambitious plans to deploy a gigabit fiber to the home network in the state of Mississippi, now considered to be one of the worst states for broadband speed and availability.

C Spire Fiber to the Home was introduced by company executives at a news conference this morning attended by community leaders. C-Spire intends to build a fiber network offering 1,000/1,000Mbps broadband, telephone and television service at a competitive price starting in 2014 in select communities in the state.

“As a brand that’s been pushing the envelope of innovation our entire existence, it’s only natural for us to want to provide the ‘what’s next’ to the customers we serve,” said Hu Meena, president and CEO of C Spire Wireless. “The ‘what’s next’ is now here and we’re ready to release the power of 1 Gig fiber to communities that want to experience the immediate and lasting benefits of 100 times the speed and 100 times the opportunities.”

C Spire will use its existing 4,000 miles of fiber optic infrastructure now providing backhaul connectivity to the company’s cell tower network and its commercial customers. An additional 1,500 miles of fiber is scheduled for installation next year.

The cell phone company will follow the lead of Google Fiber, giving Mississippi communities a chance to compete with one another for C Spire’s fiber network. C Spire will be accepting applications from neighborhoods, towns and cities in the state presenting their best case why they should be the first to get fiber to the home service. The communities that want it most, and move quickest, will get it first, promised company officials.

C Spire claimed its proposed fiber to the home network will expand faster and deeper into Mississippi than Google Fiber’s limited network in Kansas City and nearby suburbs.

“While we know some of the tangible benefits that fiber offers to individuals, families, businesses and entire communities, we’ve only scratched the surface of what’s possible with 100-times-faster Internet,” Meena said. “Similar to the transition from dial-up to broadband, no one could fathom that people would one day be able to shop online, download software and watch endless hours of video on YouTube. The undiscovered potential of fiber is what’s most exciting and compelling about our plans.”

Competing communities will be expected to explain how they intend to cut as much bureaucratic red tape as possible to win consideration. The company’s “Request for Information” (RFI) document prominently mentions “streamlined construction,” “advantageous access to public rights-of-way,” and “an attractive local franchise agreement” as the types of help most needed from local governments.

C Spire will likely not entertain franchise proposals that require the company to serve every possible resident. C Spire’s fiber business plan depends on rolling out the service only to neighborhoods where enough demand exists.

Other conditions:

• C Spire will not give away free service to schools or government buildings;
• Sizable local participation in the pre-registration process is required;
• The RFI hints that communities might be in a better position to win if they waive permit fees, issue permits within five business days, offer tax waivers, don’t require a local office for customer interaction, waive any “unacceptable ordinance provision or regulation as requested by C Spire,” and aid in rallying sign-ups for the fiber service.

Competitors, including AT&T, CableONE, Suddenlink, and Comcast may raise questions about local governments committing to rally for sign-ups. Some of those competing providers may also complain about their own franchise agreements, which often require widespread service deployment whether there is established demand for service or not.

C Spire is among a handful of companies that have recognized their existing fiber-to-cell-tower and institutional fiber broadband networks are underutilized and have the capacity to support both commercial and residential broadband applications.

C Spire is expected to announce the winning communities later this year or in early 2014.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/C Spire Fiber to the Home 9-24-13.mp4[/flv]

C Spire introduces Fiber to the Home service and explains the transformational benefits fiber broadband can deliver users. (2 minutes)