Review #8 -- FCC and a Neutral Internet Over Wireless Networks

This article, written by Jared Newman of PC World, takes a different approach to government intervention into wireless markets. Titled Wireless Wars: Will Consumers be Collateral Damage, the piece looks at how the FCC looks to address wireless neutrality issues across different wireless platforms. It seems that Newman’s muse for writing this piece was the AT&T and Apple rejection of Google Voice for the iPhone. The application was supposed to be a bandwidth hog and subsequently clog the AT&T network. The FCC saw this as a block to Internet use and neutrality. The corporations may have had legitimate claims about the bandwidth use, but the FCC still wanted answers about why it was blocking a Google, a main competitors, product.

As discussed in my last post, the difference between urban and remote access to wireless networks is a hot topic issues within this country. The divide such access creates is stark and cannot be ignored. For this reason, the FCC is also investigating billing charges and difference between those implemented by wireless companies for these very different markets. Newman’s piece did not shed much light onto what they were exactly finding, but any intervention into issues such as these is something of note. Simple infrastructure issues could answer some of higher prices, but oligopolies and even monopolistic competition could be to blame. With high barriers to entry into these markets, lack of competition can be easy explained. This is why the government has had price controls on utilities within certain areas. Such intervention is certainly possible if they find that the fair market prices do not exist in these areas.

Industry analysts believe that this type of government interaction and enforcement of a neutral internet could eventually hurt the consumer. Many believe that wireless companies will be forced to use tiered pricing systems in order to combat high bandwidth uses. Newman points out that Smartphone use has become popular because users no longer need to meter themselves like they did before with wireless minutes. A tiered system could spell the end to flat rate pricing. This would make the use of such devices theoretically more expensive. So, there seems to be a tradeoff, at least according to industry analysts. This is between the use of a free and open Internet or having restriction set by companies in order to see lower prices. This is certainly not a substantiated claim, though. If some of competition models discussed above are true, consumers may not even be currently experiencing a fair market price. So, possible government interaction could solve both of these issues. Nothing I’m writing is based on research, just a thought on both sides of the coin. If the industry analysts are correct, it will be interesting to see what exactly happens in the future of wireless devices and networks.

Newman, J. (2009). Wireless Wars: Will Consumers be Collateral Damage. PC World, 27, 14.

Review #7 -- A National Broadband Plan

This article, FCC discuses barriers to national broadband plans by journalist Marguerite Reardon, introduces the topic of a national broadband plan. The author states that the current president has made it a priority for the national to implement such a system. Affordability is one the key components to this plan. Also, remote access is paramount. Cost is a huge barrier. The system is set to cost approximately 350 billion dollars. This cost will encompass everything from the infrastructure itself to new programs to aid in education about the system. Most of these costs will be derived from small charges on consumers’ phone bills which go into a Universal Service Fund. For the most part, this money is now being funneled into providing remote phone access. This could be moved into funding broadband projects.

The statistics introduced in Reardon’s article were quite alarming. She states that 90 percent of households making 100k or more have access to broadband systems this compared to only 35 percent of families making 20k or less. This stark difference is one aspect of why a system needs to be put into place. To me, having broadband access is far more important than the continued funding of phone access. With advances in technology, such as VoIP, with broadband access, remote users can use this connection to also make phone calls. This would obviously take education in the use of these systems, but that seems to already be a component that they are examining. Also, with the increased usage of cellular devices, having these phone systems is becoming less of an issue.

Government intervention seems to be the most feasible, if not only, solution to this problem. Private firms have difficulties in providing low cost broadband options to remote areas, a population of normally lower income levels. Reardon describes this as the “middle-mile” cost, or more simply stated, the cost of running the proper systems to these areas. Subsidies must be put into place to make companies able to provide these systems at affordable prices. The author states, “this means is that lower-income people, who have less disposable income, are often the ones forced to pay higher prices, while people who have more money pay lower prices for service.” Much like services in the past, subsidies can aid in providing equal opportunities. As technology advances, with the advent of such things as WiMAX or LTE, services such as broadband can be provided to large areas with little advance in needed infrastructure.

Reardon, M. (2009). FCC discuses barriers to national broadband plans. Retrieved from http://news.cnet.com/8301-1035_3-10400725-94.html

Review #6 -- Wireless Broadband Solutions in Latin America

This article, written by Martha Garcia-Murillo and Juan Rendon for Telematics and Informatics, addresses wireless broadband systems in Latin America. The authors establish the point that the nation’s physical infrastructure is lacking and, for this reason, may benefit greatly from investment in wireless technologies. Garcia-Murillo and Rendon state that “wired infrastructure was poorly maintained and rarely upgraded.” (p. 259) For this reason, they believe that wireless solutions could provide a solution to the digital divide present in these nations.

Within the study, the authors examine technologies such as WiFi and third generation cellular devices, the later being more expensive, but both providing similar results in terms of access. Socioeconomics become the main thrust of the article. The authors focus on how different sectors of the country need to be the focus of different technologies. For those with lesser incomes, WiFi is the most ardent solutions to their access needs. On the contrary, third generation provides a more convenient, yet expensive, solution for wealthier sectors. While this article focuses on Latin America, this realization is even true within the United States. Third and fourth generation technologies are targeted towards major metropolitan areas. The free market dictates almost all of us. These populations are more affluent and sheer numbers drive investment, but it seems that investors in developing countries would have similar interests.

I found this article intriguing because it highlights a different aspect of the digital divide, this being social standing within nations. Solutions to this seem to be in having varied technologies that fit the need, and level of income, for the population. The authors state, “Wide income disparities allow the adoption of state of the art technologies such as 3G wireless – for some. Poorer segments of the population can access the Internet through WiFi in commercial establishments.” (p. 261). Examining situations where major infrastructure investment is needed, this example being a developing nation, allows a user of these technologies in a developed nation to reflect upon the reasons behind having this infrastructure. As stated before, without a market for the technology, none of this happens, at least from a private sector standpoint. Examination of the needs to populations, such as this study, can hopefully drive these investments into being made. Careful investment will hopefully lead to profits and allow systems to be maintained, a problem present in the past. This is a nice examination because it provides viable alternatives for different populations and doesn’t simply attempt to blanket everyone into a one-fit model.

Garcia-Murillo, M., Rendon, J. (2009). A model of wireless broadband diffusion in Latin America. Telematics and Informatics 28 (2009), 259-260.

Review #5 -- A Failed San Francisco Muncipal Wireless Broadband System

This article, written by Heather E. Hudson for Telematics and Informatics, is a case study of a prospective citywide wireless broadband system in the city of San Francisco. The author analyzes why the system eventually failed and also examines methods employed by similar Silicon Valley communities. Lessons are derived by this failed effort. Hudson illuminates those and elaborates on them for guidance in future municipal wireless projects.

One of the most interesting aspects of Hudson’s article is her examination of comparative statics. These position the United States against other industrialized nations, comparing their overall broadband access. For example, she states that the United States ranks 15th among these countries in access and pay, in some cases, ten to twenty-times more for like access. These numbers seem staggering. Infrastructure within the States is something we mostly take for granted. Statistics such as these call this into question. Our technological infrastructure is not evenly allocating resources throughout the nation evenly. The conclusions of Hudson’s article offer insight into this issue.

San Francisco wanted to establish a basic wireless coverage that extended to 90% of the city. This would be free, but would also allow users to subscribe to a fee based plan with additional security features. Two companies, Earthlink and MetroFi, were those bidding for the project. Without in depth analyze, after concluding research, each company felt that it would be difficult to make this endeavor profitable. This could be the main reason for our nation lagging behind other industrialized nations in terms of access. Most of our nation’s infrastructure is built by the private sector. If projects like these are not profitable, they feel little need to invest.

Hudson also found that financial constraints and lack of technical savvy from the user side as hampering the appeal of the project. This article raised many key questions about municipal wireless systems. It seems that as a nation, if we find wireless broadband access important, we need to find ways to make investment inviting for companies. This could either be through government subsidies or even educating populaces on how to use these technologies. If a market doesn’t exist because potential users are not informed on the technology, then investment will obviously not be profitable or even fruitful. This article touched on many points and it is difficult to be thorough in a short blog post, but I would encourage reading the piece and exploring more of the author’s points.

Hudson, H. E. (2009). Muncipal wireless broadband: Lessons from San Francisco and Silicon Valley. Telematics and Informatics 27(2010), 1-9.