While wireless providers currently treat Wi-Fi as a friendly way to offload wireless data traffic from their 3G and 4G networks, the wireless industry is starting to ponder whether they can also earn additional profits from regulating your use of it.

Dean Bubley has written a white paper for the wireless industry exploring Wi-Fi use by smartphone owners, and ways the industry can potentially cash in on it.

“It is becoming increasingly clear that Wi-Fi access will be a strategic part of mobile operators’ future network plans,” Bubley writes. “There are multiple use cases, ranging from offloading congested cells, through to reducing overseas roaming costs and innovative in-venue services.”

Bubley’s paper explores the recent history of some cell phone providers aggressively trying to offload traffic from their congested 3G networks to more-grounded Wi-Fi networks.

Among the most intent:

• AT&T, which acquired Wayport, a major Wireless ISP, and is placing Wi-Fi hotspots at various venues and in high traffic tourist areas in major cities and wants to seamlessly switch Apple iPhone users to Wi-Fi, where available, whenever possible;
• PCCW in Hong Kong;
• KT in the Republic of Korea, which has moved as much as 67 percent of its data traffic to Wi-Fi;
• KDDI in Japan, which is planning to deploy as many as 100,000 Wi-Fi Hotspots across the country.

America's most aggressive data offloader is pushing more and more customers to using their Wi-Fi Hotspots.

Bubley says the congestion some carriers experience isn’t necessarily from users downloading too much or watching too many online shows.  Instead, it comes from “signalling congestion,” caused when a smartphone’s applications demand repeated attention from the carrier’s network.  An application that requires regular, but short IP traffic connections, can pose a bigger problem than a user simply downloading a file.  Moving this traffic to Wi-Fi can be a real resource-saver for wireless carriers.

Bubley notes many wireless companies would like to charge third-party developers fees to allow them access to each provider’s “app store.”  Applications that consume a lot of resources could be charged more by providers (or banned altogether), while those that “behave well” could theoretically be charged a lower fee.  The only thing preventing this type of a “two-sided business model,” charging both developers and consumers for the applications that work on smartphones, are Net Neutrality policies (or the threat of them) in many countries.

Instead, Bubley suggests, carriers should be more open and helpful with third party developers to assist them in developing more efficient applications on a voluntary basis.

Bubley also ponders future business strategies for Wi-Fi.  He explores the next generation of Wi-Fi networks that allow users to establish automatic connections to the best possible signal without ponderous log-in screens, and new clients that can intelligently search out and connect to approved networks without user intervention.  That means data traffic could theoretically be shifted to any authenticated or preferred Wi-Fi network without users having to mess with the phone’s settings.  At the same time, that same technology could be used to keep customers off of free, third party Wi-Fi networks, in favor of networks operators run themselves.

Policy controls are a major focus of Bubley’s paper.  While he advocates for customer-friendly use of such controls, sophisticated network management tools can also be used to make a fortune for wireless providers who want to nickle and dime customers to death with usage fees, or open up new markets pitching Wi-Fi networks to new customers.

Bubley

For example, a wireless carrier could sell a retail store ready-to-run Wi-Fi that pushes customers to a well-controlled, store-run network while customers shop — a network that forbids access to competitors or online merchants, in an effort to curtail browsing for items while comparing prices (or worse ordering) online from a competitor.

Customers could also face smartphones programmed to connect automatically to a Wi-Fi network, while excluding access to others while a “preferred” network is in range.  Wireless carriers could develop the same Internet Overcharging schemes for Wi-Fi use that they have rolled out for 3G and 4G wireless network access.  Also available: speed throttles for “non-preferred” applications, speed controls for less-valued ‘heavy users,’ and establishment of extra-fee “roaming charges” for using a non-preferred Wi-Fi network.

Bubley warns carriers not to go too far.

“[We] believe that operators need to internalize the concept of ‘WiFiNeutrality’ – actively blocking or impeding the user’s choice of hotspot or private Wi-Fi is likely to be as divisive and controversial as blocking particular Internet services,” Bubley writes.

In a blog entry, Bubley expands on this concept:

I’m increasingly convinced that mobile device / computing users will need sophisticated WiFi connection management tools in the near future. Specifically, ones that allow them to choose between multiple possible accesses in any given location, based on a variety of parameters. I’m also doubtful that anyone will want to allow a specific service provider’s software to take control and choose for them – at least not always.

We may see the emergence of “WiFi Neutrality” as an issue, if particular WiFi accesses start to be either blocked or “policy-managed” aggressively.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/The Future of Wi-Fi.flv[/flv]

Edgar Figueroa, chief executive officer of The Wi-Fi Alliance, speaks about the future of Wi-Fi. Wi-Fi technology has matured dramatically since its introduction more than a decade ago and today we find Wi-Fi in a wide variety of applications, devices and environments.  (3 minutes)

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WPIX NY NYPD Anti-Terror Units Monitoring Verizon Strikers 8-13-11.flv[/flv]

Members of the New York City Police Department’s Critical Response anti-terrorism unit have been deployed to monitor Verizon workers on picket lines in several New York locations.  Striking workers wonder how much New Yorkers are paying in tax dollars to provide de-facto security for Verizon.  “The company made $19-billion in profit, they can’t afford to bring out their own security to watch their own men,” asked Jon Granziel, a veteran of 21-years with Verizon.  WPIX in New York has the story.  (3 minutes)

One of the conditions Comcast had to agree to as part of its multi-billion dollar deal to acquire NBC-Universal was to throw a bone to some of America’s poorest households by offering discount Internet access for three years.  Comcast agreed and is rolling out low-speed Internet at a discount in time for the upcoming school year.

“Comcast Internet Essentials,” is the ultimate in bare-bones Internet.  For $9.95 a month, customers in Comcast service areas will get 1.5Mbps download speed and 384kbps upstream, with the usual 250GB usage limit Comcast applies to everyone.  But not just anyone can qualify.  Comcast has limited the program only to households with at least one child qualified to receive free (not discounted) school lunches under the National School Lunch Program.  So if your income-challenged household doesn’t include children, or you pay for your own school lunches, you are out of luck.

Comcast is also denying access to anyone who has had any level of Comcast Internet service within the last 90 days.  So if you’ve scraped enough money together to pay Comcast’s regular prices, the cable company is not going to give you a break.

If your kids graduate or are removed from the school lunch program, your inexpensive Internet service goes with it.

If you have been late on a Comcast bill, or owe the company for unreturned cable equipment, you also cannot receive the service.

The company will also provide vouchers for a “discounted laptop” for $150 — a computer that turns out to be a netbook.  At least it comes with Windows 7 (Starter Edition).

Comcast requires would-be customers to start with an application, available by phone, at 1-855-8-INTERNET (1-855-846-8376).  The merger approval agreement required Comcast to provide the service for three years.  Guess what happens to it when the requirement ends.  No matter — Comcast is turning the entire affair to its public relations advantage, showing up on various media outlets promoting the program as if Comcast thought it up on its own.  Not quite.  We have three questions:

1. How many consumers would sign up for the service if Comcast offered $9.95 1.5Mbps to anyone who wanted it?
2. How many might consider downgrading their current service for something less expensive, especially if they are only interested in occasional web browsing?
3. Will the “digital divide” Comcast decries today be magically gone at the end of three years, when they quietly drop the program?

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KRIV Houston Comcast Internet Essentials 8-8-11.mp4[/flv]

KRIV-TV in Houston explores the various conditions Comcast places on its Internet Essentials program.  (2 minutes)

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/CNN Low Cost Internet 8-10-11.flv[/flv]

Comcast’s David Cohen appeared on CNN promoting Comcast’s Internet Essentials as a way to “bridge the digital divide” — a disparity of access American ISP’s originally created with their excessively high-priced Internet services. (3 minutes)

Verizon Communications has gone to court to limit picketing and protest activity among striking union workers who have been accused of taking their cause too far.

The company filed a lawsuit Wednesday in New York and won a court order Monday in Pennsylvania, and another in Delaware on Wednesday.  The company is waiting for rulings in New Jersey and Massachusetts that would force Verizon strikers to limit the number of picketers at any given location and stop blocking access to company buildings.

Relations between the company and striking workers have deteriorated significantly as the first week of the strike wears on.

Near Buffalo, two strikers were hit by a replacement worker’s vehicle.  A BB gun was fired at a worker still on the job in the Bronx.  Several incidents of pushing and shoving by both sides have also been documented.  But among the most serious incidents are acts of sabotage that have cut off landline and cell service, mostly in upstate New York.

Service was restored late yesterday to residents in Oneida County, who lost both home and cell phone service after fiber cables were cut.  Verizon has rushed out press releases decrying what they call “sabotage” and indirectly implying Verizon strikers are responsible.  The New York State Police continues criminal investigations in several upstate communities were vandalism has occurred.

Austin (Courtesy: Boston Herald; Photo by M. Stone)

Verizon strikers have also been following around replacement workers assigned to do home installations and repair work, and this has occasionally led to picketers arriving outside of customer homes where repair work is underway.

The Boston Herald reports one Quincy, Mass. mom found a circus outside her home yesterday when Verizon showed up to fix her phone line:

A Quincy mom has disconnected her support for striking Verizon workers yesterday after a group of mouthy picketers surrounded non-union repairmen and turned a phone-line fix at her home into what she is calling a “ridiculous” protest scene.

“I looked in the street and there are picketers, 10 of them or more, doing a circle around the Verizon truck,” said Karen Austin, 64, a mother of five who lives on Forest Avenue.

“Every time (the repairmen) would walk up to my house they would follow them. I couldn’t believe my eyes. This is ridiculous. Why are they picketing my house?”

“I’m not on a main street … I’m not a business. I’m a person who needed a line fixed,” she said.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WHDH Boston Verizon Sabotage in Mass 8-8-11.mp4[/flv]

Verizon alleges vandalism may be responsible for a significant service outage in Tewksbury, Mass., but union officials suggest Verizon’s claims are “straight out of the Verizon strike playbook.”  WHDH in Boston reports.  (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WABC NY Verizon goes to court over workers strike in East 8-10-11.mp4[/flv]

WABC in New York watched as Verizon strikers booed anyone approaching an entrance to Verizon’s headquarters.  Company officials are seeking court orders to restrain picketing activities in five states.  (3 minutes)

California’s Public Utilities Commission promises a thorough review of the merger proposal from AT&T and T-Mobile, now under increasing scrutiny by the state’s regulators for potentially reduced competition and higher prices for cell phone customers.

The PUC has held seven public meetings so far regarding the proposal, with particular focus on what T-Mobile’s exit would mean for rural communities in northern, central, and eastern California.  Under the leadership of Commissioner Catherine Sandoval, California’s review of the merger proposal is proving to be the most aggressive nationwide, surprising even seasoned regulators.

“This is pretty unheard of,” Brian O’Hara, a legislative director at the National Association of Regulatory Utility Commissioners, said in an interview with Bloomberg News. “California’s seems to be the most in-depth review. It’s amazing to me that the PUC is doing so much.”

The public-interest group Consumer Watchdog has recommended a rejection of the deal, saying it will lead to higher prices.  This week, the group sent a letter to Sandoval, the Justice Department, and the Federal Communications Commission opposing the merger.  Bloomberg notes aggressive investigations may force AT&T to sell off a growing percentage of their T-Mobile acquisition to win approval:

With the pressure from California and other regulators, AT&T may have to divest 30 percent to 40 percent of T-Mobile USA’s spectrum and subscribers nationwide, Michael Nelson, an analyst with Mizuho Securities USA, said in an interview.

“I expect the requirements to be extremely high,” he said.

California could even seek to block the deal outright, a step usually taken by the FCC or Justice Department. If federal regulators approve the deal and California objects, the commission could go to the state’s attorney general to file a lawsuit to stop it, said Naruc’s O’Hara.

“An attorney general lawsuit may be the only recourse,” he said.

[flv]http://www.phillipdampier.com/video/CNBC ATT T-Mobile Merger Backlash 7-11.flv[/flv]

CNBC reports some members of Congress are coming out against the merger proposal, claiming it will reduce competition and raise prices.  (2 minutes)